Saigon Thuong Tin Bank Lao Co., LTD (SACOMBANK LAO) Environmental & Social Management System (ESMS) Micro, Small and Medium Enterprise (MSME) Access to Finance – Emergency Support and Recovery Project (MSME A2F – ESR Project) (P174169) Version 2 14 June 2022 044 Haengboun Road, Haisok Village, Chanthabouly District, Vientiane Capital, Lao PDR Email: contact_Sacombank Lao@sacombank.com; Phone: +856 21 265 726; Fax: +856 (21) 265 725 Environmental and Social Policy Saigon Thuong Tin Bank Lao Co., LTD (SACOMBANK LAO) is a commercial bank that has provided banking, financial and insurance services in Lao PDR since 2008. The main services include deposits, loans and other banking and financial services. Loans are for auto, housing, personal and Micro, Small and Medium Enterprise (MSME), especially financing on working capital, cash flow financing, property financing /refinancing and performance guarantee or combination. The target sectors are trading, service, manufacture and agriculture and agribusiness sector. SACOMBANK LAO has a vision to be a leading modern universal retail bank in the region and expected to realise the vision by implementing four missions: (i) providing best-in-class multi-purpose financial solutions for customers; (ii) maximizing added value to partners, investors, and shareholders; (iii) strengthening the banking industry and protecting staff wellbeing; and (iv) committing to build social communities. In addition, the bank sets core values to (i) overcoming challenges towards success; (ii) providing innovative approaches for sustainable development; (iii) strengthening community and social responsibility; and (iv) making a difference with breakthrough innovations in business and operations. SACOMBANK LAO has been aware of the importance of environmental and social (E&S) issues and that well-planned development is crucial for sustainable business operation as stated in the mission and values. Therefore, as a participating financial institute (PFI) in the Lao PDR Micro, Small, and Medium Enterprise (MSME) Access to Finance Emergency Support and Recovery Project (MSME A2F – ESRP), SACOMBANK LAO has adopted the project’s Environmental and Social Management System (ESMS), which will apply the following E&S policies and measures, among others for project sub loans: � There will be no financing of excluded activities, as defined in this ESMS; � Committing that the operations of borrowers are adequately assessed against the environmental & social requirements as defined by the applicable environmental and social national and local laws and regulations in Lao PDR, the World Bank’s Environmental and Social Framework and require compliance; � Ensuring that the ESMS is consistent with the requirements of the relevant World Bank’s Environment and Social Standards (ESSs); � Environmental and social risk management is adequately integrated into the credit review cycle to ensure they are all screened for environmental & social risks and impacts; � Ensuring that there are designated people with roles and responsibilities to support the implementation of the ESMS and ensure its corporate compliance with standards on labour and working conditions; � Ensure that updates to the ESMS are made as required; and � Report as required to our stakeholders on ESMS implementation. Please add sign off e.g. senior management representative in charge ESMS here Date MSME A2F - ERS Project (P174169): SACOMBANK’s ESMS 2 Table of Contents List of Table 5 List of Figure 5 Acronyms 6 Introduction 8 Project Background 8 An Overview and Organisational Context of SACOMBANK LAO 13 Objectives 15 Applicable Standards and Guidelines 15 Moderate Risk Activities 17 Low Risk Activities 17 Relevant Laws in Lao PDR 17 Scope 19 ESMS Communication & Disclosure 19 Environmental and Social Safeguard Personnel and Training 19 Environmental & Social Procedure 20 DOSMEP Oversight 24 Reporting 24 Material Adverse Events 24 Routine Reporting 25 Stakeholder Engagement Plan 25 Review and Update of the ESMS 25 Document Control 25 Annex A Exclusion List 27 Annex B Environmental and Social Risk Categorisation Guidance 29 Annex C Screening and Appraisal Format 38 Annex D Template Environmental and Social Action Plan 42 Annex E Biannual Environmental and Social Monitoring Report Template for the Bank to report to DOSMEP 43 Annex F Material E&S Incident Report Template 47 Annex G E&S Monitoring Report to be prepared by the bank 48 Annex H Labour Management Procedures 49 1. OVERVIEW OF LABOR USE ON THE PROJECT 49 2. ASSESSMENT OF KEY POTENTIAL LABOR RISKS 49 3. BRIEF OVERVIEW OF LABOR LEGISLATION: TERMS AND CONDITIONS 50 4. BRIEF OVERVIEW OF LABOR LEGISLATION: OCCUPATIONAL HEALTH AND SAFETY 51 5. RESPONSIBLE STAFF 52 6. POLICIES AND PROCEDURES 52 7. AGE OF EMPLOYMENT 53 8. TERMS AND CONDITIONS 54 9. GRIEVANCE MECHANISM 54 Annex I Sacombank’s Vision, Mission and Value 57 Annex J Evaluation of Labour Management System and Practice of Sacombank 58 Annex K List of Sub-loan for Refinancing under Sacombank 61 MSME A2F - ERS Project (P174169): SACOMBANK’s ESMS 4 List of Table Table 1 Sacombank Staff between 2019 and 2021...................................................................................... 15 Table 2 Phase 1: Screening and Appraisal (of sub-loan or project) ............................................................ 21 Table 3 E&S Categorization ........................................................................................................................ 22 Table 4 Phase 2: Closing ............................................................................................................................. 23 Table 5 Phase 3: Monitoring ....................................................................................................................... 23 List of Figure Figure 1 Overview of the Project Structure ................................................................................................. 10 Figure 2 Sacombank Organization Chart .................................................................................................... 14 Figure 3 E&S Review Process .................................................................................................................... 21 Acronyms A2F Access to Finance COVID-19 Coronavirus Disease 2019 CPF Country Partnership Framework DOSMEP Department of Small and Medium Enterprise Promotion ESIA Environmental and Social Impact Assessment EID Emerging infectious diseases E&S Environmental and Social EPL Environmental Protection Law ESCP Environmental and Social Commitment Plan ESF Environmental and Social Framework ESMF Environmental and Social Management Framework ESMS Environmental and Social Management System ESR Emergency Support and Recovery ESS Environmental and Social Standard FI Financial Intermediary GBV Gender-based Violence GRS Grievance Redress Service IDA International Development Association IFC International Finance Corporation IA Implementing Agency IEE Initial Environmental Examination IPF Investment Project Financing IMF International Monetary Fund LMP Labour Management Procedure LoC Line of Credit LNCCI Lao National Chamber of Commerce and Industry MOF Ministry of Finance MOIC Ministry of Industry and Commerce MoNRE Ministry of Natural Resources and Environment MSMEs Micro, Small and Medium Enterprises MSME A2F - ERS Project (P174169): SACOMBANK’s ESMS 6 MTR Mid-Term Review M&E Monitoring and Evaluation OHS Occupational Health and Safety LOC Open Learning Campus PAD Project Appraisal Document PEC Project Executive Committee PFI Participated Financial Institute PMU Project Management Unit POM Project Operations Manual PPA Performance and Policy Actions PPSD Project Procurement Strategy for Development PLR Performance and Learning Review PF Promotion Fund PFI Participating Financial Institution PRC Project Review Committee SEP Stakeholder Engagement Plan SACOMBANK Saigon Thuong Tin Bank Lao Co., LTD LAO STEP Sustainability Training and E-Learning Program SEA Sexual Exploitation and Abuse SFA Subsidiary Financing Agreement SMEs Small and Medium Enterprises VAC Violence Against Children WB The World Bank MSME A2F - ERS Project (P174169): SACOMBANK’s ESMS 7 Introduction Project Background COVID-19 is one of several emerging infectious diseases (EID) resulting in substantial public health and economic impacts. The last moderately severe influenza pandemics were in 1957 and 1968; each killed more than a million people around the world. Micro, Small, and Medium Enterprises (MSMEs) have been greatly impacted by economic disruptions resulting from the ongoing COVID-19 crisis, while labor- intensive sectors and those linked to global and regional value chains will also be greatly affected, with growth estimated to decline to between -1.8 and 1 percent in 2020. Tourism-related sectors, including transport, food and accommodation services, and retail trade—which account for 11 percent of total employment—have been hit particularly hard. Supply chain disruptions have caused delays in delivering inputs to export-oriented industries and the construction sector. Economic disruptions to business activity also arose due to a significant depreciation of the exchange rate in the parallel market and a higher inflation rate, which increased in recent months from an average of 3.3 percent in 2019 to 6 percent in the first half of 2020. Most Lao businesses are small- and medium-size enterprises which are especially vulnerable to these economic disruptions. Given that the COVID-19 outbreak has negatively affected the growth prospects of Lao PDR’s most important trading partners, this is having an adverse consequence on Lao PDR’s export performance. A prolonged, severe, and pervasive outbreak will also have a significant adverse impact on the agriculture, manufacturing, and service sectors through trade and investment channels, with a high risk of damage to financial markets. COVID-19 also eroded some earlier gains in poverty reduction. This project is planned to be a continuation of the existing World Bank funded project Lao PDR – Small and Medium Enterprise Access to Finance Project (P131201), which is being successfully implemented by the Ministry of Industry and Commerce (MOIC) and commercial banks in Lao PDR. This Project is implemented under the World Bank’s new Environmental and Social Framework (ESF) and Environmental and Social Standards (ESSs), which was officially endorsed and launched in October 2018. Thus, the ESMS should be consistent with the ESF and relevant ESSs which are designed to avoid, minimize, reduce or mitigate the adverse environmental and social risks and impacts of projects. The ESF goes beyond the traditional “do no harm� approach to avoiding, minimising, and managing environmental and social (E&S) risks, and maximising developmental gains. The Project aims to increase and enhance access to finance for MSMEs in the context of the COVID-19 emergency and recovery. It will achieve this through a combination of lines of credit to MSMEs (for emergency and recovery phases of the crisis), intermediated through select financial institutions, to MSMEs. The Project will also invest in strengthening the capacity of financial institutions to implement crisis management strategies and develop MSME finance business strategies, technical assistance to support MSMEs obtain access to finance, and capacity building to DOSMEP to strengthen its ability to formulate and implement policies to promote MSME development. Whilst the Project is focusing on emergency response to the crisis, it will also have a longer-term impact on the economic recovery by providing a flexible approach to addressing financial needs of the MSMEs during the crisis and in the recovery phase. While most SMEs under the existing project are located in Vientiane Capital, this project will also provide support to MSMEs in local levels and rural area of Lao PDR. The list of the sub-loan projects for refinancing, including location is in Annex K, while the exact location of the MSMEs to be financed will not be known until implementation. The target beneficiary MSMEs under the Project are registered micro (1-5 employees), small (6-50 employees) and medium private enterprises (51 to 99 employees) operating in Lao PDR that have been in MSME A2F - ERS Project (P174169): SACOMBANK’s ESMS 8 business for at least two years and wish to sustain their business activities. Based on the SME A2F experience, it is anticipated that the majority of beneficiary MSMEs are in the trade, manufacturing, and service sectors. For the SME A2F out of a total of 169 approved sub-loans to MSMEs, 53% were for trade sector, 33% for service sector, 8% for industry sector, 3% for agriculture sector and 3% were for handicraft sector. 72 sub-loans were to microenterprises, 93 to small enterprises and 4 to medium sized enterprises. Targeted servicing sectors under this Project include: (i) Farming and livestock; (ii) Agriculture processing (iii) Handicrafts; and (iv) Tourism. Specifically, beneficiary MSMEs are expected to comprise the following private business types: pre-existing restaurants, coffee shops, small scale resorts, grocery shops, fish farms, pig farms, mobile shops, silk weaving shops, travel agencies, private tour operators, production and distribution of construction materials stores, steel form work rental service, clothing store, shoes shops, gold/jewellery shops, car service shop, furniture shops, mini marts, pottery manufacture, aluminium frame and glass partition shops, etc. In addition, as some additional context on the sectors that Lao PDR promotes, in accordance with the Decree on SME promotion fund No.299/Gov dated 4th September 2019, are: � Industrial processing of agricultural products; � Handicrafts; � Agriculture, plantations, and animal husbandry; and � Tourism. Types of activities to be financed under the Project are as follow and loan amount is not exceeded 200,000 USD with tenor of maximum of 9 years. � Working capital needs (loans for payment of salaries, marketing costs, audit and accounting costs); � Acquisition of new transportation equipment (automobiles, trucks, other specialised equipment, and replacement parts); � Acquisition of communications equipment (phone and fax equipment, computers, printers, servers, software, other hardware, etc.); � Purchase of construction materials for shops selling construction material, building of warehouses or renovation of existing physical premises on the land fully owned by the MSMEs; � Purchase of feed stock, and feed mixer machine; and � Acquisition of fixed assets (industrial machines, refrigerators, industrial equipment, replacement parts, tools and equipment, quality labs, etc.). Under this Project, the MOIC, through its Department of Small and Medium Enterprise Promotion (DOSMEP) is the single project’s Project Management Unit (PMU), so it is taking the responsibility to oversee the implementation of the ESMS by the five participating commercial banks referred to as Participating Financial Institutions (PFIs). Under the Environmental and Social Commitment Plan (ESCP)1 the Project is required to ensure a number of aspects are fulfilled including: � DOSMEP establishes and maintains a unit (within DOSMEP) to take on overall responsibility for Project implementation, including implementation of the ESCP with qualified staff and resources to support management of E&S risks and impacts of the Project including ensuring there is a 1 The ESCP is part of the loan agreement between the Government of Lao and the World Bank wherein the Borrower agrees to implement a series of environmental and social management measures and actions required for the project to meet the Environmental and Social Standards (ESSs) throughout the entire project cycle. MSME A2F - ERS Project (P174169): SACOMBANK’s ESMS 9 nominated E&S Focal Point who is responsible for the monitoring of the implementation of the ESMS, and a senior management representative; � The PFIs will prepare and implement an ESMS consistent with the project ESMS (for example, this may be through adopting the project ESMS) and assign both a senior management representative to have overall accountability for environmental and social performance and a staff member as an E&S focal person to coordinate E&S requirements and implementation of the Project ESCP and ESMS; and � The ESMS of the PFIs will meet the requirements of Environmental and Social Standard 9 (ESS 9) on Financial Intermediaries2 including ensuring there is the capacity to maintain it. Reference in this ESMS is also made to other requirements including to: � Stakeholder Engagement Plan (SEP) (including a Grievance Mechanism)3; and � Labour Management Procedures (see Annex H). Figure 1 Overview of the Project Structure for “flow through� of E&S Requirements World Bank DOSMEP (PMU) SACOMBANK, PFI PFI LAO PDR Eligible MSME Eligible MSME Eligible MSME Sub-borrowers Sub-borrowers Sub-borrowers Figure 1 Overview of the Project Structure Role of DOSMEP and ESF Capacity: DOSMEP was established in 2005 under Prime Minister Decree No. 42/2004, dated April 20, 2004, with the mandate to develop a national strategy and policies to promote SME development and to coordinate and supervise their implementation. DOSMEP is the Implementing Agency (IA) and will be directly responsible for the implementation of project components, and for day-to-day execution of activities of the Project. For 2 http://documents1.worldbank.org/curated/en/484961530217326585/ESF-Guidance-Note-9-Financial-Intermediaries-English.pdf 3 The SEP is part of the loan agreement between the Government of Lao and the World Bank wherein the Borrower agrees to define a program for stakeholder engagement, including public information disclosure and consultation, a mechanism by which people can raise concerns, provide feedback, or make complaints about the project and a grievance redress mechanisms mechanism to address the concerns throughout the entire project cycle. MSME A2F - ERS Project (P174169): SACOMBANK’s ESMS 10 component 1 Line of Credit, DOSMEP on behalf of MOIC, will conduct the due diligence of PFIs and sign Subsidiary Financing Agreements with the PFIs. DOSMEP has established a PMU headed by the Director General of DOSMEP, as the Project Director. For its day-to-day operations, the PMU has hired a Project Manager and will hire adequate staff, external consultants, and other resources necessary for the successful implementation of the Project. It should be noted that DOSMEP was the implementing agency for the recently concluded Access to Finance Project, which also included a line of credit operation through participating financial institutions (PFIs). The project performance including safeguard implementation performance of all PFIs under supervision of DOSMEP was satisfactory4. Three of the Lao PDR SME Access to Finance’s PFIs will be involved in this Project and the Director General of DOSMEP and the Project Manager as well as potential PFIs who had an experience working on the Lao PDR SME Access to Finance Project and keen on the Bank safeguard policies/procedures have received ESF training from the Bank E&S specialists during project preparation in 2020. A summary of the responsibilities of DOSMEP, its PMU and the PFIs in relation to the ESMS is provided below: DOSMEP responsibilities as apex institution under the Project included the following: Coordination and Information Management � Assessment and selection and monitoring of PFIs � Administration of Subsidiary Financing Agreements (SFAs) between DOSMEP and PFIs � Submission to the World Bank of sub-loan proposals requiring its prior review Advising PFIs and Beneficiary Enterprises � Providing assistance and proactive advice to PFIs and sub-borrowers on all aspects of the project, including terms and conditions, procurement, disbursement, E&S procedures, and M&E Monitoring and Reporting � Ensuring compliance (including by all PFIs) with all the procedures prescribed in the POM and Project Financing Agreement � Ensuring the maintenance of sub-loan files, in the headquarters of the PFI, ready for audit/review of DOSMEP and/or the World Bank � Monitoring the eligibility of the SMEs based on the sub-loan agreements � Reporting to the World Bank on the sub-loan portfolios with information on: • Sub-loan commitments, disbursements, delays, and problem loans; • Sub-loan portfolio performance aggregated and for the period; • A report on sample sub-loans reviewed indicating compliance with sub-loan eligibility criteria, including risk-based assessment; and • Analysis of the sub-loan portfolio, with information on geographical distribution, sectors, size of SMEs, use of funds (investment/working capital), size and maturity of sub-loans/sub-leases, performance of subprojects, and so on. The analyse results will be fed back into the project and E&S management cycle. 4 Based on an evaluation report of the Lao PDR - Small and Medium Enterprise Access to Finance Project performance is available on the world bank website. https://projects.worldbank.org/en/projects-operations/project- detail/P131201 MSME A2F - ERS Project (P174169): SACOMBANK’s ESMS 11 PMU � Establish and maintain a unit within DOSMEP to take on overall responsibility for Project implementation, including facilitating implementation of this ESMS, SEP and GRM with qualified staff and resources to support management of ESMS at the PFIs, including ensuring there is a nominated E&S Focal Point5 who is responsible for the monitoring of the implementation of the ESMS; Ensure that the ESMS that is implemented at each PFI will identify, screen, manage, and monitor the E&S risks and impacts of MSME sub-loans on an ongoing basis, commensurate with the nature and scale of their risks and impacts. Conduct spot-checking, support revising reports by PFIs. The first two sub-loans by any of the participating PFIs will be submitted to the Bank for prior reviewed by the Bank, thus giving an opportunity to check that the ESMS is executed adequately. The rest of the retroactive sub-loans will be also screened and identified risk level as a part of E&S audit report as well as determine if sub-loans required due diligent report and impact assessment to be submitted to the Bank for prior reviewed; � Support Participating Financial Intermediaries (PFIs) in meeting the ESMS requirements; � Report on ESMS implementation status of World Bank that are received by the PFIs and submit an annual E&S report to World Bank that reports on the implementation of the ESMS at each PFI and the portfolio of sub-loans for each PFI; and � Promptly report to the World Bank any significant accident/fatal incident, and severe incidents of ESMS non-compliance. As soon as the PMU becomes aware of an alleged or actual incident, the PMU should promptly inform the World Bank of the incident and promptly provide information about the incident to the World Bank as well as further details as they become available. These incidents are related to environmental aspects (e.g., natural disaster, pollution, hazardous and unsafe workplace), and social aspects (Sexual Exploitation and Abuse (SEA), Sexual Harassment (SH), Gender-Based Violence, Violence Against Children (VAC), forced labours and child labours). For any severe incident such as a fatality, incidents that caused or may cause great harm to the environment, workers, communities, or natural or cultural resources, incidents that may result in high levels of lasting damage or injury, incidents that requires an urgent and immediate response, etc., the PMU shall notify the World Bank within 24 hours after it becomes aware of the incident. Role of the Participating Financial Institutions (PFIs) including SACOMBANK LAO and their ESF capacity As mentioned above, three of the PFIs that participated under a former World Bank funded project will be participating under the current Project and are well versed in World Bank E&S procedures and will appoint focal point persons to handle E&S issues under the Project. In addition, DOSMEP and its PMU will provide training in E&S issues to the PFIs as specified in the project ESF implementation and training workplan and budget with clear timelines. The PFIs will be responsible for environmental assessment for sub- borrowers/sub-projects, and for ensuring that each sub-loan proposal includes process of screening environmental and social safeguards impact, develop mitigation measures to avoid and mitigate those impacts and documentation, as well as monitor to ensure effective implementation of the ESMS. Terms and conditions of subsidiary financing between DOSMEP and PFIs � PFIs must start and remain in compliance with the eligibility criteria for PFIs as specified in the SFA to be signed between DOSMEP and the PFIs. � PFIs will be responsible for ensuring that SME sub-borrowers comply with the well- established Private Sector Procurement Methods or Commercial Practices which have been found acceptable to the International Development Association (IDA)for the procurement of 5 DOSMEP nominated two staff (Mr. Vilayout Inmyxai as the focal point and Mr. Vannaseng Ounalom as the assistant) MSME A2F - ERS Project (P174169): SACOMBANK’s ESMS 12 goods, works, non-consulting services, and consultant services under sub-loans, and applicable Lao Law, Regulations and Legislations and relevant World Bank E&S policies and standards, and the E&S requirements of the Financing Agreement and applicable E&S instruments. � PFIs will provide DOSMEP with a set of documentation for all sub-loans to enable it to maintain all project records and make them available for ex post review by the World Bank or by external auditors as necessary. � PFIs and MSMEs will be required to provide adequate information for the purpose of monitoring and an impact assessment during the life of the project (and for a certain period after the project or the duration of the reimbursement of the loan or sub-loan), as may be requested by the World Bank and/or DOSMEP Roles and Responsibilities of PFIs related to ESMS � Establish and maintain a unit with a senior management representative to have overall accountability for environmental and social performance in addition to a staff member as an E&S focal person to coordinate E&S requirements and implementation of the ESMS; � Ensure that staff are provided with adequate budget and resources to carry out their assigned duties and responsibilities; � Develop an ESMS to allow the sub-loans to meet the E&S requirements of the Project. The ESMS will be publicly disclosed; � Ensure that sub-loans are screened and meet the requirements of the Exclusion List under the Project, assigned risk level, and determine if any additional due diligence or impact assessment is required or not; � Ensure that sub-loans are screened against the applicable local, provincial and national laws and regulations in Lao PDR and take measures to ensure (including site visits if necessary) to validate and document that the MSME loan applicant has appropriately identified in its loan application the activities and compliance with laws. If an applicant states that the necessary permits or licenses have not yet been issued, PFIs will advise the applicant to obtain the licenses and permits before loans can be approved. If the national and or local requirements are different from those of the World Bank, the most stringent should be applied; � Monitor compliance of MSME beneficiaries in line with this Project requirements; and � Submit to the PMU periodic reports on the development and implementation of the ESMS. An Overview and Organisational Context of SACOMBANK LAO SAIGON THUONGTIN BANK LAO., LTD (SACOMBANK LAO) was found in 2008, and now has head and branches office in Vientiane Capital, Savanhnakhet province and Champasak province. In 2021, the bank had total staff of 200. Of which, 82 were women. The core services include loan, deposit money, transfer money and E-banking service, etc. As of September 30th, 2021, there were 2,517 borrowers. Of which, 159 clients were MSMEs and 60 were large scale business. Under MSME, 62 MSME were in trading sector, 1 in logistic sector, 41 in tourism sector, 17 in agriculture sector, 6 in handcraft sector, 14 in industry sector, and 18 were other sectors. The maximum loan was about 12,671,052.63 US$, while the average amount of loan was about 605,263.32 US$. MSME A2F - ERS Project (P174169): SACOMBANK’s ESMS 13 SACOMBANK LAO sets a vision, mission, and value to promote sustainable development, social and community responsibility and staff wellbeing, among others (Annex J). Recently, SACOMBANK LAO contributed environment protection and social development as follows, among others. - Participate as one of PFI under the Lao PDR SME Access to Finance and implement the sub-loan in line with the World bank Safeguard Policies. - Supported education for Ban Hongmuang Primary School, Atsaphone District, Savannakhet Province in 2020; - Donated supplies and consumables to help the flood victims to Keng Hua Pa and Tha Mae villages, Sepon district, Savannakhet province in 2020; - Donated cash, supplies and food to the Health, Foundation (1623 and Wat Fatek), the Vietnam Association, and help the parents of people affected by Covid 19 in 2021. SACOMBANK LAO and clients including MSMEs have been impacted by economic and social disruptions resulting from the ongoing COVID-19 crisis and participating the MSME A2F ESR Project with expectation to enhance business recovery and building back better. The Bank also adopted Environmental and Social Management System (ESMS) of the MSME A2F ESR project. The sub-loans proposed for refinance are totally 35 sub- loans or MSMEs (Annex K). Of which, 31% are micro enterprise, 69 % are small enterprise, and trading sector covered 34%, services sector 40%; agriculture sector 17%, manufacture 3% and other sectors 6%. The sub-loans consist of two types: working and investment capital, which shared 71% and 29%, respectively. The maximum loan size was about US$ 200,000, while the average amount of loan was about US$ 71,678, the total sub loans is US$ 2,652,008. Figure 2 Sacombank Organization Chart MSME A2F - ERS Project (P174169): SACOMBANK’s ESMS 14 Table 1 Sacombank Staff between 2019 and 2021 No Head and branch Staff Remark 2019 2020 2021 Total Female Total Female Total Female 1 Head office 82 40 77 32 73 31 Vientiane capital 2 Lanxang 35 12 34 11 34 10 3 Vientian capital 23 9 22 10 23 10 4 Thatlouang 20 7 21 8 23 9 5 Savannakhet 26 11 25 11 25 11 6 Chanpasack 27 11 25 11 22 11 Total 213 90 204 83 200 82 Objectives The ESMS is set out to identify, assess, manage, and monitor the environmental and social risks and impacts of sub-loans on an ongoing basis under the Project, taking into account the national and local laws and regulations in Lao PDR and the requirements of the World Bank. As such the key objectives are: � To integrate E&S considerations into the lifecycle of sub-loans to eligible MSMEs (sub- borrowers) to ensure that E&S risks and impacts are consistently identified, screened, and managed; � To set out the responsibilities for E&S risk and impact identification, assessment, decision- making, as well as monitoring and escalation; and � To work with DOSMEP/PMU and our clients or the sub-borrowers to manage E&S risks and impacts and support ongoing capacity building in the implementation of the Project. Applicable Standards and Guidelines The project is Financial Intermediary (FI) project. Beneficiary of Partial Credit Guarantee under component 1, and beneficiary MSMEs of Emergency Line of Credit (Component 2) in particular for the COVID recovery phase are expected to engage in diverse types of activities similar to existing project (farming and livestock, retail, handicrafts and tourism) which are likely to cause minimal or no adverse environmental and social risk of impact due to small size of MSMEs and credit to be provided to MSMEs (not exceed 200,000 USD). The potential negative project’s environmental impacts (for example, dust from rice mill, odour from pig farm, wastewater from restaurant, pig farm, fishpond, vegetable processing, etc.) are likely to be minor, localized and reversible due to the small scale of business enterprises and can be mitigated with simple measures and environmental and social good practices. No large scale, significant and/or irreversible impacts are financed under the proposed project. Similar to the current project that taking into an account clean technology (reducing water consumption in dyeing process, reducing flour for noodle factory, install biogas, bag house to reduce dust, etc.) the project will bring positive environmental and social benefits in terms of reducing pollutions from agriculture productions, reducing the GHG emissions, and reducing health risk for consumers by improving the food safety and quality, reducing health risk due to COVID-19 as well MSME A2F - ERS Project (P174169): SACOMBANK’s ESMS 15 as utilization of water resources and energy effectively. With this environmental and social moderate risk rating, ESS9 as well as ESS 1, 2, and 10 are applied. During the project implementation, all candidate sub-projects will be screened against the project’s exclusion list of this ESMS, categorized and assessed for their E&S risks and impacts prior to financing under the project. Since the FI subprojects are likely to cause minimal or no adverse environmental or social risks or impacts, but all subprojects need to meet the national environmental, labour and social laws and regulations regardless of risk. The bank has assigned both a senior management representative to have overall accountability for environmental and social performance plus a staff member or consultant as E&S Focal Point to manage the day-today implementation of ESMS. The project required information to be disclosed will be disclosed during project preparation and implementation to promote transparency and accountability on the use of the project’s funds. The following are the minimum standards that the ESMS will apply to all transactions: � Exclusion List (see Annex A Exclusion List); � Applicable local, provincial and national laws and regulations (see Relevant Laws in Lao PDR); � Screening out of any substantial and high-risk activities (see Annex B Environmental and Social Risk Categorisation Guidance and Annex C Screening and Appraisal); � Monitoring and reporting the implementation and compliance of Environmental and Social Action Plan, impacts and or incident related to the sub-loans (see Annex D, E, F and G); � Implement Labour Management Procedures (Annex H) and SEP as well as Grievance Redress Mechanism (GRM). As High or Substantial Risk sub-loans will not be financed under this project, Substantial and High-Risk activities are also described below. Note that given the nature of MSME financing these are not anticipated to be encountered, nonetheless should be confirmed with the application of the ESMS. Also see Annex B Environmental and Social Risk Categorisation Guidance. This also includes descriptions of the types of activities that would be eligible under the ESMS (Low and Moderate Risk activities). For clarity characteristics of Substantial and High-Risk activities are provided below. High Risk Activities Risks may include: • Wide range of significant adverse risks and impacts • Long term, permanent and/or irreversible, impossible to avoid entirely • Some cannot be mitigated or require complex, unproven mitigation, sophisticated social analysis • High in magnitude and/or in spatial extent (large to very large area or population); • Significant adverse cumulative or transboundary impacts; • High probability of serious adverse effects to human health and/or the environment • High value and sensitivity (e.g., protected and internationally recognized areas) • High value, sensitive lands or rights of Indigenous Peoples and other vulnerable minorities • Intensive or complex involuntary resettlement or land acquisition • Impacts on cultural heritage or densely populated urban areas • May give rise to significant social conflict, harm or human security risks • A history of unrest in area or sector, concerns about use of security forces MSME A2F - ERS Project (P174169): SACOMBANK’s ESMS 16 Substantial -Risk Activities Risks may include: • Some significant risks and impacts • Mostly temporary, predictable and/or reversible • Possibility of avoiding or reversing but with substantial investment and time • May give rise to limited degree of social conflict, harm, human security risk; • Medium in magnitude and/or in spatial extent (medium to large area and population) • Less severe, more readily avoided/mitigated cumulative and/or transboundary impacts • Medium to low probability of serious adverse effects to human health and/or the environment (with known and reliable mechanisms to prevent or minimize) • Lower effects on areas of high value or sensitivity • More readily available and reliable mitigatory and/or compensatory measures Moderate Risk Activities Risks may include: � Some risks, but not significant, predictable and expected to be temporary and/or reversible; � Low in magnitude and limited in scale; � Site-specific, without likelihood of impacts beyond the actual footprint of the sub-loan project; and � Low probability of serious adverse effects to human health and/or the environment (e.g., do not involve use or disposal of toxic materials/substances, routine safety precautions are expected to be sufficient to prevent accidents, etc.). Low Risk Activities Risks may include: � Few and or negligible risks, temporary, avoidable and manageable by a code of practice; � Low, minor in magnitude and or very small in scale; � Site-specific, small risk and or affected area without likelihood of impacts beyond the actual footprint of the sub-loan project; and � No probability of serious adverse effects to human health and/or the environment. Relevant Laws in Lao PDR All sub-loans provided need to be compliant with the provisions of legal framework of Lao PDR, (e.g., environment, social, health, safety & labour laws, construction and operation permits etc.) as such there is MSME A2F - ERS Project (P174169): SACOMBANK’s ESMS 17 a need to screen to ensure that material aspects are met in addition to sub-borrowers confirming compliance with the relevant laws as part of the loan agreement. Key relevant legislation includes: � The Environmental Protection Law (EPL) was issued in 2000 and revised in 2012. The EPL (2012) covers the general requirements for effective 1) protection of natural and social environment including environmental quality; 2) management of control of pollutions, waste, and toxic substance from various sources; 3) environmental impacts caused by human or natural disasters; 4) environmental certification and permission, and 5) public participation. � National Environmental Standards Decree, 2017, defines quality of air, soil, water, noise and vibration, pollutions, and measures for management and control. � Pollution Control Guidelines, 2015, defines types of pollution, management and control, certification, monitoring, inspection and reporting of pollutions and management. � Polluted and Hazardous Waste Management Guidelines, 2015, defined principles and management methods, monitoring and inspection, obligations, and responsibility for management of polluted and hazardous waste. � Law on Chemicals Management, 2016, defined type of chemicals including hazardous chemicals, safety measures and prevention and solutions for accidents, businesses and management including licencing, monitoring, inspection, and responsibilities for chemicals management. � Law on Hygiene, Disaster Prevention and Health Promotion, issued in 2011 and updated 2019 , defines the principles, rules, measures and requirements for hygiene, disease prevention and health promotion. Particularly, it provides a regulation and guideline for hygiene practices for all group of people including labour and occupation, places and facilities, production, consumption and environmental health. Disease prevention includes immunization and prevention of communicable and infectious disease. Health promotion includes rules, measures and requirements for promoting health and quality of life of all group of people, nutrition, healthy environment and recreation. � Labour Law, adopted in 2006 and updated in 2013, defines the principles, regulations and measures on administration, monitoring, labour skills development, recruitment, and labour protection. This labour law applies to all employers, registered and unregistered employees, Lao employees working for foreign organizations, and foreign employees working within the Lao PDR. Importantly, it defines a mandatory obligation for employers and other relevant parties on Labour Occupational Health and Safety (OHS) to protect labour health and safety, and labour accident and occupational diseases. � Law on Preventing and Combating Violence Against Women and Children (2014) Law on gender (2019) and Women Development and Protection (2004). These legislations provide regulations and measures to manage, prevent and address potential misconduct among civil servants including health workers and outsourced volunteers, community health and safety issues and risks associated with Sexual Exploitation and Abuse (SEA), Gender-based Violence (GBV) and Violence Against Children (VAC). � Law on Handling Petitions (2016) provides provisions of objectives, principles and process of applying and handling different types of grievance, petition and complaints that may be raised by citizens. Since a relevant amount of the FI sub-loans are likely to cause minimal or no adverse environmental or social risks or impacts, it is expected that most of sub-loans, SACOMBANK LAO will apply the national environmental, labour and social laws and regulations. However, this ESMS was prepared considering sub- loan screening and assessment for ESS1 (Assessment and Management of Environmental and Social Risks and Impacts, ESS2 (Labour and Working Conditions), ESS3 (Resource Efficiency and Pollution Prevention MSME A2F - ERS Project (P174169): SACOMBANK’s ESMS 18 and Management), ESS4 (Community Health and Safety), ESS7 (Indigenous Peoples) and ESS10 (Stakeholder Engagement and Information Disclosure). This project will require special attention to monitor and enforce compliance in the application of ESS9 (Financial Intermediaries -FI) on (i) the PFI’s environmental and social policy; (ii) clearly defined E&S procedures and capacity: to screen subprojects (application of exclusion list, review of industry sector and technical aspects of each subproject) and conduct due-diligence to evaluate E&S risk and assign risk categories (low, moderate, substantial and high risk); (iii) systems/processes for due diligence within the PFI to evaluate, monitor, review and manage E&S risks and impacts of the subprojects: evaluate the E&S performance of on-going subprojects and the portfolio on a periodic basis; (iv) organizational capacity and competence: including a budget and a senior management position designated for reporting on the ESMS as well as providing training and capacity-building on ESMS procedures and performance; (v) procedures of update the ESMS; ( vi) the project’s Labour Management Procedure (LMP) aligned with ESS2, including provision on Occupational Health and Safety (OHS) and measures related to emergency preparedness; and (vi) external communications mechanism, including a Stakeholder Engagement Plan and a Grievance Mechanism. Scope The provisions of the ESMS are applicable to the bank and its clients/borrowers using funds provided by the Project. � The DOSMEP/PMU is the entity responsible to assist preparing this ESMS, provide ESF training, supervising, monitoring and reporting of ESMS implementation. DOSMEP/PMU will also regularly update environmental and social information and PFIs portfolio Risk. � The Bank as one of the PFIs is the entity responsible for adoption, localisation and implementation of the ESMS for eligible sub-loans and ongoing monitoring. This ESMS is consistent with the project ESMS, and will need to be adopted and disclosed before the beginning of the operations. This ESMS will apply to each of the sub-loans processed under the Project. There are no waivers or dispensations for its application. ESMS Communication & Disclosure Ensuring awareness of relevant stakeholders (see the Stakeholder Engagement Plan) of the existence of the ESMS which supports its implementation, including to all relevant personnel at the PMU and PFIs. The ESMS is available publicly here: � [link will be added] Environmental and Social Safeguard Personnel and Training SACOMBANK LAO aims to develop and maintain organisational capacity and competency for implementing the ESMS, with clearly defined roles and responsibilities. SACOMBANK LAO designated a representative of a senior management to have overall accountability for environmental and social (E&S) performance of the sub-loans, including the implementation of this ESMS and Labour Procedures and resources necessary to support such implementation. In addition, SACOMBANK LAO or the representative will: (a) designate a technical staff to be responsible for day-to-day implementation of the ESMS, including MSME A2F - ERS Project (P174169): SACOMBANK’s ESMS 19 the environmental and social procedures; (b) ensure that adequate resources6 are available for management of and training in environmental and social issues; and (c) ensure that adequate technical expertise, either in-house or external expert support, is available to carry out due diligence and manage the environmental and social risks of the bank’s sub-loans, including providing implementation support as required. The E&S representative and technical staff are: 1. Mr Chanthavy Soundavong, the representative of a senior management, as the E&S Focal Point 2. Mr Phetsalath Phimmavongsa, Loan officer, responsible for day-to-day implementation 3. Mr Somvang Mounphokham, Credit officer, responsible for day-to-day implementation. SACOMBANK LAO including the appointed E&S staff used to work and represent the bank to coordinate the SME Access to Finance Project including E&S safeguards and participated the MSME A2F ERS project launch and inception meeting. In addition, all relevant staff participated an orientation meeting and on the job training on ESMS, ESCP and SEP provided by the project E&S consultant and DOSMEP in July after signing the agreement to participate in the project. SACOMBANK LAO, especially the E&S responsible staff is expected to receive training and support from the project including DOSMEP’s consultants, staff of the World Bank, and others (e.g., National University of Laos, Faculty of Social Science and other training organizers supported through the World Bank-financed projects) on this and the Project’s ESMS and SEP, GRM Labour Management Procedures, provisions to prevent sexual abuse (SEA), Gender Based Violence (GBV) and/or violence against children (VAC). Once the staff are knowledgeable and equipped with a certain set of skills on ESMS, SACOMBANK LAO will have an in-house and on the job training for all staff in headquarter and branch offices in the provinces, who are responsible for and relevant to the loans financed under the project to ensure a continual capacity improvement and expansion along with ESMS implementation. In addition, we will encourage our relevant staff to take relevant online training courses such as World Bank E-Learning Course on Managing Environmental and Social Performance as well as the “ESF Fundamentals�. Environmental & Social Procedure All candidate sub-loans will be screened by SACOMBANK LAO against the project’s exclusion list of the ESMS, categorized and assessed for their E&S risks and impacts prior to financing under the project. The overall summary of the process of E&S review under the ESMS is set out below: � Phase 1 – Screening and Appraisal o Screen against exclusion list activities o Categorise o Conduct an E&S appraisal of the sub-borrower, and audit or due diligence, as appropriate � Phase 2 – Closing o Confirm commitments in the loan agreement (and any actions required) � Phase 3 – Monitoring o As part of regular monitoring follow-up on E&S aspects and also any E&S issues reported by the sub-borrower 6 A budget will be estimated following ESMS training which was scheduled in September 2021 but pending due to the second wave of COVID-19 pandemic and delayed in relation with this EMSM and due diligence. It is rescheduled to be in May 2022. MSME A2F - ERS Project (P174169): SACOMBANK’s ESMS 20 Figure 3 E&S Review Process Phase 1 - Update to ESMS Screening and (where required) appraisal Phase 3- Phase 2 - Closing Monitoring Details are further set out in the sections below. Table 2 Phase 1: Screening and Appraisal (of sub-loan or project) Entity Responsibilities Documents Loan ▪ Screen a sub-borrower’s activities against the Exclusion List (in Completed Officer Appendix A). screening ▪ If any excluded activities are identified, then the loan should assessment proceed no further. refer to Annex ▪ If no exclusion list activities are identified, then the application C Screening can proceed to the next Phase. and Appraisal ▪ Categorisation should be undertaken (see Annex B Format Environmental and Social Risk Categorisation Guidance) of the sub-borrower also see Table 1 below. Where “high� or “substantial� risk activities are identified, the sub- loan processing should not proceed. This includes an activity that requires an IEE or ESIA in Lao PDR. ▪ The sub-borrower must be able to demonstrate compliance with applicable local, provincial and national laws and regulations in Lao PDR, including permits and approvals). ▪ Where compliance cannot be demonstrated, an E&S Action Plan must be agreed with the sub-borrower in order for the sub-loan to proceed. The plan must specify all of the necessary actions to bring the sub-borrower into compliance. A target completion date for each specified action must also MSME A2F - ERS Project (P174169): SACOMBANK’s ESMS 21 Entity Responsibilities Documents be agreed. A template is included in Annex D Template Environmental and Social Action Plan. E&S ▪ Provide input and support where required in screening of the Focal sub-loan, including categorisation and identifying any gaps to be Point addressed. Credit ▪ This is the last part of evaluation, and is required to confirm: Reviewed ▪ No exclusion list activities (including high/substantial risk screening activities) assessment ▪ The E&S risks have been appropriately understood, refer to Annex including the category, and where necessary a corrective C Screening action plan developed and Appraisal ▪ Reject to provide loan (business or loan purpose exists in Format Exclusion List) Table 3 E&S Categorization Category Definition Notes High Risk High Risk means any business activity which is likely to have Not allowed to significant adverse environmental impacts that are sensitive, proceed under the diverse or unprecedented, and which includes, for the ESMS. avoidance of doubt, activities involving (a) involuntary resettlement, (b) risk of adverse impacts on ethnic minorities, (c) significant risks to or impacts on the environment, community health and safety, biodiversity, cultural heritage, or (d) significant occupational health and safety risks (risk of serious injury or fatality to workers). Substantial Substantial Risk means any business activity that is not as Not allowed to Risk complex as High-Risk activities, however, has some proceed ESMS. significant risks and impacts with the possibility of avoiding or reversing but with substantial investment and time and may give rise to limited degree of social conflict, harm, human security risk. Moderate Moderate Risk means any business activity that has Allowed, but Risk potentially limited adverse environmental or social risks requires review (see and/or impacts that are few in number, generally site-specific, Annex C). largely reversible, and readily addressed through mitigation measures. Impacts are often site-specific without likelihood of impacts beyond the activity’s footprint and routine safety precautions are expected to be sufficient to prevent accidents. Low Risk Low Risk means any business activity minimal or negligible Allowed but should risks to and impacts on human populations and/or the be straightforward to environment with few or no adverse risks and impacts and review (see Annex issues. C). Note – also see Annex B for further detail. MSME A2F - ERS Project (P174169): SACOMBANK’s ESMS 22 Table 4 Phase 2: Closing Entity Responsibilities Documents Loan Officer ▪ Review legal documentation in relation to E&S related ▪ Legal definitions, representations and undertakings, including the Agreement incorporation of any actions required to address gaps. Annex with E&S D Template Environmental and Social Action Plan. inclusions for ▪ Key inclusions of the legal agreement with the sub- the sub- borrowers are: borrower - Not to engage in any activities on the Exclusion List - To comply with all legal requirements. - To report to the E&S Focal Point and or senior manager if there is a substantial change in the nature of the operations. - To report to the E&S Focal Point and or senior manager if there are any material E&S incidents. - (If required) to address any gaps identified. Credit ▪ Ensure that the legal agreement with the borrower meets ▪ Legal ESMS requirements on E&S aspects. Agreement with E&S inclusions for the sub- borrower Table 5 Phase 3: Monitoring Entity Responsibilities Documents Loan Officer ▪ Ensure there is reporting of material adverse E&S events. ▪ Annex F A template is included in Annex F Material E&S Incident Material E&S Report Template to formally record these events. Incident Report Examples of material E&S incidents may include: Template - Major injuries or fatalities (employees, the general ▪ An example public or contractors); (that can be - Strikes or significant employee disputes; tailored) is - Regulator action in relation to E&S matters; included as - Spills, pollution incidents, fires, explosions; and Annex E Annual - Etc. Monitoring ▪ The category will determine the extent of monitoring and Report Template oversight required of the sub-loan during the post-financial for annual close monitoring phase. Monitoring will monitoring. - Low risk sub-loans do not require monitoring. - Medium risk sub-loans require straightforward follow-up to find out if there have been any significant changes in business activities, confirm ongoing compliance with the exclusion list and local MSME A2F - ERS Project (P174169): SACOMBANK’s ESMS 23 Entity Responsibilities Documents requirements and any actions required to be addressed have been closed out. Monitoring will be undertaken annually. (If the sub-loan tenor is less than 12 months monitoring is not required.) Annual site visits to these transactions are also recommended. ▪ In the event of non-compliance in relation to E&S matters (including material issues reported or a grievance raised) the loan officer (s) will seek to resolve the issue with the sub-borrower in order to address the issue. Actions will be documented, and the loan officer (s) will work with the sub-borrower to ensure that corrective actions are implemented. If the issue cannot be addressed through engagement, the loan officer (s) may seek to remedy the situation through available clauses in the loan documentation. Material developments will be reported to the PMU for onward reporting to World Bank. DOSMEP Oversight DOSMEP is required to provide oversight and support in the implementation of the PFI’s ESMS. This includes: � Sample review of complete loan applications and loan documents; � Ensuring reporting is provided to DOSMPE from the PFIs; and � Providing support where required on screening of loans (e.g., where there is uncertainty on the E&S risk profile of a Sub-borrower). Reporting Material Adverse Events Sub-borrowers will be required to promptly report to SACOMBANK LAO (which will report to the PMU/DOSMEP) any actual or potential material adverse E&S event immediately after becoming aware of it. As noted above, these include: � Major injuries or fatalities (of employees, the general public or contractors); � Strikes or significant employee disputes; � Regulator action in relation to E&S matters; � Spills, pollution incidents, fires, explosions; and � Others including unacceptable SEA/SH, GBV, VACas well as any other violations of a social nature such as use of child labours, forced labours, forced eviction, forcible removal of any person from property of public spaces etc. MSME A2F - ERS Project (P174169): SACOMBANK’s ESMS 24 Routine Reporting SACOMBANK LAO will report semi-annually to the PMU/DOSMEP. In turn the PMU will report annually to World Bank. In addition, the ESF consultant hired by PMU/DOSMEP will prepare an annual portfolio audit to confirm that ESMS is being complied with and loans are not being used to finance high or substantial risk projects. A content and a format for the report is included in Annex E Annual Monitoring Report Template. Stakeholder Engagement Plan As part of the Project, as required under the ESCP, the PMU has prepared, disclosed, adopted, and implemented a Stakeholder Engagement Plan (SEP) consistent with ESS10. As part of the SEP, a Grievance Mechanism is described. The overall objective of the SEP is to define a program for stakeholder engagement, including public information disclosure and consultation, throughout the entire Project cycle. The SEP outlines the ways in which the project team will communicate with stakeholders and includes a mechanism by which people can raise concerns, provide feedback, or make complaints about the Project and any activities related to the Project. The PMU is responsible for maintaining the SEP in collaboration with PFIs. The SEP has been publicly disclosed here: � DOSMEP web page: http://dosmep.org/download-info-2/ � World Bank web page: https://projects.worldbank.org/en/projects-operations/document- detail/P174169 Project documents including ESMS, SEP, ESCP, lists of sub-loans, audit reports and monitoring reports will be publicly disclosed on the website above, and also on SACOMBANK LAO’s website at https://www.sacombank.com.la/la/en/Pages/default.aspx Review and Update of the ESMS The ESMS will be updated and reviewed: � In the first year or within 3 months after initial deployment, and thereafter annually. � If there are modifications in the Applicable Standards under the ESMS (for example significant changes to local legalisation). � Incorporation of feedback from the SEP/Grievance Mechanism. � Documentation of lessons learnt and/or good practice based on implementation. Note that revisions will need to be communicated to all relevant partners such as DOSMEP and the World Bank (through the DOSMEP/PMU). Document Control SACOMBANK LAO has a robust M&E system to record and monitor all aspects of sub-loans under the Line of Credit (LOC) component. Funds under the LOC will be disbursed to clients/borrowers based on documentation on sub-loans provided by the bank, which will include a check list in accordance with this MSME A2F - ERS Project (P174169): SACOMBANK’s ESMS 25 ESMS and confirmation that all submitted sub-loans will be in compliance with the requirements of the ESMS. These documents will be entered into the M&E system and stored in the bank filing system for Project documents, for prior or post review by the World Bank or for audit purposes. The bank will also maintain sub-loan documents submitted to DOSMEP under their own filing systems. In addition, the bank will: � Provide DOSMEP with a set of documentation for all sub-loans to enable it to maintain all project records and make them available for ex post review by the World Bank or by external auditors as necessary; and � The bank and MSMEs will provide reasonable information for the purpose of monitoring and an impact assessment during the life of the project (and for a certain period after the project), as may be requested by the World Bank and/or DOSMEP. MSME A2F - ERS Project (P174169): SACOMBANK’s ESMS 26 Annex A Exclusion List These are a list of activities that form part of the ESMS where any involvement would trigger a “no go� on providing a loan to a Sub-borrower. For the avoidance of doubt, any activities that require an Initial Environmental Examination (IEE) or an Environmental & Social impact Assessment (ESIA) under regulations in Lao PDR are excluded. The following exclusions to ALL sub-loans processed under the Project: � Production or trade in any product or activity deemed illegal under host country laws or regulations or international conventions and agreements, or subject to international bans, such as pharmaceuticals, pesticides/herbicides, ozone depleting substances, PCBs, wildlife or products regulated under CITES. � Production or trade in weapons and munitions. � Production or trade in alcoholic beverages (excluding beer and wine)2. � Production or trade in tobacco2. � Gambling, casinos and equivalent enterprises. � Production or trade in radioactive materials. This does not apply to the purchase of medical equipment, quality control (measurement) equipment and any equipment which is considered to be the radioactive source to be trivial and/or adequately shielded. � Production or trade in unbonded asbestos fibres or use of asbestos-containing materials. This does not apply to purchase and use of bonded asbestos cement sheeting where the asbestos content is less than 20%. � Drift net fishing in the waterway using nets in excess of 2.5 km in length. � Production or activities involving harmful or exploitative forms of forced labour7/harmful child labour8. � Sub-loans involving logging/harvesting of timber or wood products. � Production and distribution of construction materials is one of the eligible activities provided that wood/lumber production are sourced legally and further due diligence of the sources will be pursued as part of processing and approval of the transaction. � Commercial logging operations for use in primary tropical moist forest production or trade in wood or other forestry products other than from sustainably managed forests. � Sub-loans involving any transaction that will require acquisition of land regardless of tenure or ownership, physical relocation of households or displacement of livelihoods. � Activities involving major construction and civil works that would cause significant adverse impact and require an impact assessment (IEE or ESIA) according to the national regulations and in line with WB ESF policies (e.g., higher risk activities), which would be beyond the capacity of the MSMEs to manage. � Activities based on or directly linked to land/natural resource-based productions such as food production and processing, and other transactions that cause impacts that are required high 7Forced labour means all work or service, not voluntarily performed, that is extracted from an individual under threat of force or penalty. 8Harmful child labour means the employment of children that is economically exploitive, or is likely to be hazardous to, or to interfere with, the child’s education, or to be harmful to the child’s health, or physical, mental, spiritual, moral, or social development. MSME A2F - ERS Project (P174169): SACOMBANK’s ESMS 27 investment and or unlikely to be addressed within project timeframe and the capacity of project stakeholders. � Industrial-scale or EIA required activities involving significant conversion or degradation of natural and/or critical habitats and/or any activities in legally protected or internationally recognized areas. � Industrial–scale or EIA required activities involving production, harvesting, or trade in wood or other forestry products from plantation and natural forests other than from legal and sustainable origin. � Industrial-scale or EIA required activities involving harvesting of wild fish populations or other aquatic species other than from legal and sustainable origin. � Activities, including relocation, that have adverse impacts on the lands, natural resources, or critical cultural heritage subject to traditional ownership or under customary use by the Indigenous Peoples (ethnic minorities). � Activities involving significant alteration, damage, or removal of any critical cultural heritage. � High and Substantial risk sub-loans (following the definitions of World Bank’s Environmental and Social Framework (also see Annex B). In this case it means any activities that would require an impact assessment under Lao PDR requirements. MSME A2F - ERS Project (P174169): SACOMBANK’s ESMS 28 Annex B Environmental and Social Risk Categorisation Guidance Categorisation This document is intended to provide guidance on the categorization of sub-borrowers. Whilst this guide provides an overview to the characteristics and some examples of each category, categorisation should be considered on a case-by-case basis factors such as location, environmental & social context, scale, and magnitude of impacts need to be considered. Table B1 - Categories Category Definition Example Activities High Risk High Risk means any business ▪ Oil and Gas: activity which is likely to have ‒ Greenfield exploration and production significant adverse environmental and operations. social impacts that are socially ‒ Refinery construction and operation. sensitive, irreversible, large-scale or ▪ Mining and Coal Processing Sector: unprecedented, and which includes, ‒ Operations that involve large scale for the avoidance of doubt, activities extraction of minerals, coal or building involving (a) involuntary materials, via underground or open-pit resettlement, (b) risk of adverse mining. impacts on indigenous peoples, (c) ‒ Development of large mineral significant risks to or impacts on the processing facilities/integrated mills. environment, community health and ▪ Power Sector: safety, biodiversity, cultural heritage, ‒ New thermal power station or (d) significant occupational health development. and safety risks (risk of serious injury ‒ Hydropower developments with large or fatality to workers). dams and other impoundments designed for the holding back or permanent storage of water (and run of the river with significant environmental & social impacts. ‒ Large scale electric power transmission and distribution. ▪ Transportation and Logistics: ‒ Large infrastructure projects, including development of [new] ports and harbours, airports, road, rail, and mass transit systems. ▪ Realignment and/or widening of an existing road, where such new road, or realigned and/or widened section of road. ▪ Activities that require an ESIA in Lao PDR (See Table B2 below). MSME A2F - ERS Project (P174169): SACOMBANK’s ESMS 29 Category Definition Example Activities Substantial Risk Substantial Risk means any business ▪ Power Sector: activity that is not as complex as ‒ Expansion of existing thermal power High-Risk activities, however, has operations within an existing footprint some significant risks and impacts and/or will not result in significant with the possibility of avoiding or environmental/social impact reversing but with substantial investment and time and may give ‒ Renewable power developments that rise to limited degree of social will not result in significant conflict, harm, human security risk. environmental/social impacts. ▪ Manufacturing: ‒ Development of a manufacturing facility where there are no significant environmental & social impacts, however it is not part of an existing industrial park ▪ Infrastructure: ‒ Development of a large water supply network using existing water supply (i.e., development and construction of infrastructure) ‒ Development of datacentres, where there are no significant environmental & social impacts, however recognising that these can be significant users of energy. ▪ Activities that require an IEE and or ESIA in Lao PDR (See Table B2 below). Moderate Risk Moderate Risk means any business ▪ Acquisition of new transportation activity that has potentially limited equipment (automobiles, trucks, other adverse environmental or social risks specialised equipment, and replacement and/or impacts that are few in parts); number, generally site-specific, ▪ Small-scale processing of agricultural largely reversible, and readily addressed through mitigation produce e.g., rice. measures. Impacts are often site- ▪ Building of small warehouses or specific without likelihood of impacts renovation of existing physical premises beyond the activity’s footprint and on the land fully owned by the MSMEs; routine safety precautions are expected to be sufficient to prevent ▪ Acquisition of assets such as industrial accidents. machines, medium sized tools and equipment. MSME A2F - ERS Project (P174169): SACOMBANK’s ESMS 30 Category Definition Example Activities Low Risk Low Risk means any business activity ▪ Office based activities such as marketing, minimal or negligible risks to and consultancy, etc. impacts on human populations and/or ▪ Working capital needs (loans for payment the environment with few or no adverse risks and impacts and issues. of salaries, marketing costs, audit and accounting costs); ▪ Acquisition of communications equipment (phone and fax equipment, computers, printers, servers, software, other hardware, etc.); ▪ Purchase of construction materials for shops selling construction material, ▪ Purchase of feed stock, and feed mixer machine; ▪ Acquisition of fixed small assets (refrigerators, replacement parts, etc.), small tools and equipment etc.). ▪ All types of retail outlets (except those dealing in hazardous or toxic chemicals, flammable materials); and ▪ Restaurants and other food premises. Under Ministerial Agreement No. 8056/MONRE, a list of activities is provided and are divided into two categories. Activities in category 1 are required to conduct an Initial Environmental Examination (IEE) and those in Category 2 are required to complete an Environmental and Social Impact Assessment (ESIA). The investment projects and activities have been divided into 5 sectors as follows: (1) energy; (2) agriculture and forestry; (3) industry processing; (4) infrastructure and service and (5) mining Type and size details of investment projects and activities classified into category 1 and 2 are in the table below: MSME A2F - ERS Project (P174169): SACOMBANK’s ESMS 31 Table B2 – Activities Requiring IEE and ESIA in Lao PDR CATEGORY 1 - CATEGORY 2 - TYPES OF INVESTMENT PROJECTS REQUIRED TO REQUIRED TO AND ACTIVITIES CONDUCT IEE CONDUCT EIA I. Investment projects and activities in energy sector Electric power development (a) 1-15 megawatt or (a) ≥ 15 megawatt or Electricity generation by (b) catchment basin < (b) catchment basin ≥ 200 1.1 Hydropower (Hydropower plants 200 million m3 or million m3 or construction) (c) catchment area (c) catchment area ≥ 1,500 <1,500 hectares hectares Nuclear power, control and 1.2 All size disposal of nuclear waste 1.3 Natural gas or biogas power 5-50 megawatts > 50 megawatts 1.4 Wind power by using turbines 2-10 turbines > 10 turbines Coal, oil or biomass power plant 1.5 ≤ 10 megawatts > 10 megawatts project Gas and petroleum 1.6 Petroleum and pipelines All sizes 1.7 Extraction of oil or natural gas All sizes 1.8 Oil refinery All sizes 1.9 Petroleum storage facilities 5,000-50,000 m3 > 50,000 m3 High voltage transmission development 1.10 High voltage transmission construction: 1.10.1 High voltage ≥ 230 Kilovolt ≤ 15 Kilometres > 15 Kilometres 1.10.2 High voltage < 230 Kilovolt All sizes High voltage power distribution 1.11 < 10 hectares ≥ 10 hectares station II. Investment projects and activities in agriculture and forestry Tree plantation and crops Planting and cutting industrial tree 2.1 20-200 hectares > 200 hectares plantation 2.2 Plantation of industrial crops 20-400 hectares > 400 hectares MSME A2F - ERS Project (P174169): SACOMBANK’s ESMS 32 Animal raising and fisher\ies Large animal rearing (cattle, 2. 3 ≥ 500 head buffaloes, horses, etc.) 2.4 Poultry raising ≥ 5.000 head 2.5 Pig raising ≥ 500 head Fishpond and aquatic culture in 2.6 ≥ 10 hectares industrial ponds Fish cage and aquatic culture in 2.7 ≥ 300 m2 cages along rivers 2.8 Crocodile raising ≥ 100 heads III. Investment projects and activities in processing industrials Food processing industry Production, processing and storage of foods (meat, fish, fruit, 3.1 ≤ 1 ton/day > 1 ton/day cooking oil, animals and animal feed) 3.2 Milk processing factory ≤ 40 ton/day > 40 ton/day Tapioca and tapioca products 3.3 40-80 ton/day > 80 ton/day processing 3.4 Sugar factory ≤ 30 ton/day > 30 ton/day 3.5 Liquor manufacture ≤ 500,000 litters/year > 500,000 litters/year 3.6 Drinking water processing All sizes 3.7 Tobacco factory All sizes Textile, pulp, paper and wood products Textile, cotton, garment 3.8 All sizes manufacture and dye factories 3.9 Leather tanning factory All sizes 3.10 Leather processing factory ≤ 1 million pieces/year > 1 million pieces/year Wicker, bamboo and rattan 3.11 All sizes production factory 3.12 Plywood factory ≤ 100,000 m2 /year > 100,000 m2 /year MSME A2F - ERS Project (P174169): SACOMBANK’s ESMS 33 3.13 Paper factory ≤ 30 tons/year > 30 tons/year 3.14 Printing house All sizes Chemical products and clinical equipment Petroleum and hydrocarbon 3.15 All sizes factory 3.16 Chemical production factory All sizes Medical equipment and pharmaceutical factory using 3.17 All sizes chemical reactions and biochemicals 3.18 Cleaning products ≤ 10 tons/day > 10 tons/day 3.19 Rubber manufacture 50-200 tons/year > 200 tons/year 3.20 Plastic manufacture ≤ 400 tons/year > 400 tons/year Non-metallic product manufacture 3.21 Glass product factory All sizes Mineral product production and 3.22 All sizes no other metals processing 3.23 Cement, lime and plaster factory ≤ 20 tons/hour > 20 tons/hour Mining extraction industry 3.24 Steel and iron smelting factory ≤ 5,000 tons/year > 5,000 tons/year 3.25 Precious metal processing factory All sizes 3.26 Steel processing factory ≤ 50 tons/day > 50 tons/day Non-ferrous metal processing 3.27 All sizes factory Metal fabrication (tanks, sinks, 3.28 All sizes etc.) 3.29 Battery production factory All sizes Other industries Home appliances, office 3.30 equipment, and electrical tools All sizes production Automotive and alkaline battery 3.31 ≤ 70 tons/year > 70 tons/year production factory Spare parts factory for 3.32 ≤ 1,000 tons/year > 1,000 tons/year automobiles and related machines Bicycles and wheelchairs for 3.33 ≤ 10,000 sets/year > 10,000 sets/year disabled people MSME A2F - ERS Project (P174169): SACOMBANK’s ESMS 34 3.34 Home appliances factory ≤ 10,000 pieces/year > 10,000 pieces/year 3.35 Water supply and treatment All sizes Waste treatment 3.36 Disposal of non-hazardous waste ≤ 5,000 tons/year > 5,000 tons/year 3.37 Hazardous waste disposal All sizes 3.38 Hazardous waste treatment All sizes Other waste management and 3.39 All sizes treatment Construction of a factory for 3.40 All sizes recycling Construction of a waste 3.41 All sizes incinerator 3.42 City wastewater treatment ≤ 50,000 persons >50,000 persons 3.43 Industrial wastewater treatment All sizes 3.44 Waste drainage construction All sizes IV. Investment projects and activities in infrastructure and services Backfill for marsh, river, canals 4.1 All sizes damaging public benefits Dormitory and condominium 4.2 >50 rooms construction 4.3 Golf course construction All sizes 4.4 Sport complex construction All sizes 4.5 Hotel or resort construction ≤ 80 rooms > 80 rooms 4.6 Hotel complex construction ≤ 50 hectares > 50 hectares Tourism and recreation in areas of 4.7 environment and social All sizes significance Special economic zone 4.8 All sizes development 4.9 Hospital construction ≤ 80 beds > 80 beds 4.10 Railway construction All sizes Road construction (national, 4.11 province, district, special zone All sizes levels) MSME A2F - ERS Project (P174169): SACOMBANK’s ESMS 35 Road rehabilitation (national, 4.12 province, district and special zone All sizes levels) 4.13 Airport construction All sizes 4.14 Telecom network construction All sizes Navigation (improvement of 4.15 ≤ 200 tons > 200 tons channels along rivers) 4.16 Port construction ≤ 500 tons (excluding > 500 tons (excluding ship 4.16.1 Port for public transport ship weight) weight) ≤ 500 tons (excluding > 500 tons (excluding ship 4.16.2 General goods port ship weight) weight) 4.16.3 Dangerous goods port All sizes Erosion protection and 4.17 ≤ 1 Kilometre >1 Kilometre embankment construction V. Investment projects and activities in mining sectors Mining processing and exploitation 5.1 Gravel and sand extraction 1,000-50,000 m3/day > 50,000 m3/day 5.2 Rock drilling and transport ≤ 50 tons/day > 50 tons/day Extraction of construction ≤ 100,000 m3/year or > 100,000 m3/year or areas 5.3 materials (earth, gravel, sand, etc.) areas ≤ 20 hectares > 20 hectares Extraction of solid minerals 5.4 All sizes (without using chemicals) Extraction of solid minerals 5.5 All sizes (using hazardous chemicals) 5.6 Solid minerals processing ≤ 50,000 tons/year > 50,000 tons/year Water control and management Abstraction and use of groundwater for use in industry, 5.7 500- 5,000 m3/day > 5,000 m3/day agriculture and urban consumption Construction of reservoir and 1-200 million m3 or > 200 million m3 or height 5.8 dams height of dam ≤ 10 m3 of dam > 10 m3 MSME A2F - ERS Project (P174169): SACOMBANK’s ESMS 36 Areas that are important for environmental and social aspects cover the following zones: � All areas or most areas of proposed zone have been announced as protection area, conservation areas in accordance with the law on forest No. 64/NA dated 13/06/2019; � All areas or most areas of proposed zone have been announced as wildlife and aquatic animal conservation area in accordance with law on wildlife and aquatic animals, No. 07/NA dated 24/12/2008; � All areas or most areas of proposed zone have been announced as national cultural heritage and history areas in accordance with law on national heritage No. 44/NA dated 24/12/; � All areas or most areas of proposed zone have been announced as water resource conservation areas in accordance with law on water and water resource, No. 23/NA dated 11/05/2017; and � Other areas have been announced as environmental and social important areas in different periods. MSME A2F - ERS Project (P174169): SACOMBANK’s ESMS 37 Annex C Screening and Appraisal Format Environmental and Social Aspects Screening Checklist Borrower Name: Location: Loan Amount (US$) and Purpose: Industry Sector: Brief Borrower Description: Completed by: Reviewed by: Date: Date: Category Low Risk Medium Risk High/Substantial Risk (do not proceed) Rationale (please summarise the reasons for the category selected): Compliance with the Applicable Requirements — Check all that apply: Exclusion List Activities Yes No (if there are exclusion list activities identified do not proceed) National regulatory requirements Yes No Environmental, health and safety permits granted: (________________________________________________________________________) Injuries and fatalities have occurred: (how and when: ___________________________________________________________) Labour-related fines: (when and why: ____________________________________________________________) Environmental incidents and fines: (when and why: ____________________________________________________________) MSME A2F - ERS Project (P174169) 38 Site(s)—Check all that apply: Non-urban/undeveloped land Proximity to river/stream/pond/lake Proximity to protected area (e.g., forest/endangered species)/ecologically sensitive area (e.g., river/protected areas) Proximity to culturally sensitive/indigenous area Environmental Issues – Check all that apply: Air emissions Wastewater Boilers Wastewater discharged to: Generators _____________________________________ Vehicles and equipment Oil separators Furnaces and incinerators Cleaning operations Welding and soldering Cleaning operations On-site burning Spraying operations Use of solvents Separation tanks or filters Use of fumigation Foul sewers and septic tanks Use of exhaust ventilation De-watering/water pump out Water treatment units Solid waste Hazardous chemicals, fuels, and pesticides Waste generated On-site chemicals or fuels storage Types of waste: Protective measures against leaks/spills ____________________________________ Signs of leaks/spills ____________________________________ Protective measures against rain Hazardous waste (e.g., waste oils, pesticide washings, solvents, clinical waste, asbestos) Signs of corrosion on tanks/containers Waste disposed to Secured storage areas against theft On-site spill clean- up equipment ____________________________________ Training on proper handling of chemicals and fuels Pesticide use and management MSME A2F - ERS Project (P174169) 39 Resource use Nuisance Main Materials used: Dust ____________________________________ Noise ____________________________________ Odours Use of renewable natural resources Fumes Use of tools and equipment Water source: _______________________ Vibration Energy source: ______________________ Traffic congestion Based on the above are there any issues (e.g., poor practices, hazardous conditions, non-compliance with local requirements etc.)? If so, please describe: Community Interactions — Check all that apply: No designated person in charge of responding to questions from the community No procedures for managing community complaints Use of security personnel Based on the above are there any issues (e.g., community complaints, problems with the community and security personnel, etc.)? If so, please describe: Social issues – Check all that apply: Land acquisition required (do not proceed) Displacement/resettlement of local settlements (do not proceed) Impact on local settlements/livelihood (do not proceed) Impact on indigenous peoples (do not proceed) Complaints from neighbours/communities On or adjacent to site of cultural/archaeological importance (do not proceed) Based on the above please briefly describe any issues: MSME A2F - ERS Project (P174169) 40 Labour issues —Check all that apply: No Personal Protective Equipment provided (e.g., safety goggles/hard hat/protective glove) Inadequate employee health and safety measures (e.g., fall prevention/ventilation) Inadequate working conditions (e.g., air quality/lighting/confined spaces/on-site hygiene) Inadequate terms of employment (e.g., working hours/rest breaks/time off/overtime pay) Unequal employment opportunities (e.g., discrimination against gender/ethnic group/age) Payment below minimum wage Employees below minimum age Child or forced labour (do not proceed) No process for employees to voice complaints No recognition of employee organizations/labour unions Comments (any issues identified): Additional comments Please provide further details (e.g., number of persons affected due to E&S gaps identified, types of emissions, hazardous substances found, etc.) for better clarity of the E&S condition at the investee company and attach any supporting documents where applicable. Comments: Actions to be taken (include in the loan agreement) The following actions are to be taken to address gaps against Lao PDR requirement (in case of exclusion list issues the loan should not proceed). Note gaps to be addressed should be put into the E&S Action Plan (see Annex D of the ESMS): Ref. Action Description AND Related Completion Due Date No. Standards/Requirement Indicator (DD/MM/YYYY or defined number of days linked to an event e.g., after loan disbursement) MSME A2F - ERS Project (P174169) 41 Annex D Template Environmental and Social Action Plan An Environmental and Social Action Plan (ESAP) should be tabular in format and designed to address the gaps identified in the sub-loan assessment (Annex C) and should be incorporated into the loan documentation. The aim is for the ESAP to be as succinct as possible, but clear, and set realistic timelines with clarity on what is required. Reference Action Description AND Related Completion Indicator Due Date No. Standards/Requirement (DD/MM/YYY Y or defined number of days linked to an event) 1 e.g., Obtain a water abstraction license Water abstraction 30 days prior to for the groundwater abstraction well that license obtained drilling of the is planned as part of the new well development to meet e.g., Water Use Regulations. 2 e.g., Ensure that all workers have written Contracts signed by all Within 90 days contracts that explain their rights and workers after the loan obligations and have had these contracts receipt. explained to them this should be in line with Labour Code. etc. etc. etc. etc. MSME A2F - ERS Project (P174169) 42 Annex E Biannual Environmental and Social Monitoring Report Template for the Bank to report to DOSMEP Name of Organization Completed by (name): Position in organisation: Date: Portfolio Information (Financed by MSME A2F Project) Report Covering Period: From: To: For the reporting period, please provide the following information about your portfolio: Total exposure outstanding for most Average loan or Product line Description recent FY year end transaction size (in US$) (in US$) MSME loan Microenterprise (1-5 employees), small (6-50 employees) and medium private enterprises (51 to 99 employees) Exposure by Industry Sectors Please provide an indicative % of portfolio that these sectors represent of the total portfolio. MSME A2F - ERS Project (P174169) 43 Industrial Sector Outstanding % of exposure (in US$) portfolio Animal Production Apparel Chemicals Collective Investment Vehicles Common Carriers Construction and Real Estate Consumer Goods Crop Production Electrical Equipment, Appliances and Components Fabric Mills Fabricated Metal Product Manufacturing Finance & Insurance Finishing (Dyeing, Printing, Finishing, etc.) Fishing Food & Beverages Forestry Furniture and Related Products Integrated Textile Operation (Spinning, Weaving/Knitting, but no Garment) Internet Projects Leather and Allied Products Machinery and Other Industrial Non-metallic Mineral Product Manufacturing Oil, Gas and Mining Plastics & Rubber Primary Metals Printing & Publishing Pulp & Paper Spinning (Yarn, Including Integrated with Fiber Production) Telecommunications MSME A2F - ERS Project (P174169) 44 Industrial Sector Outstanding % of exposure (in US$) portfolio Textiles - Others Transport Service Transportation Equipment Utilities Warehousing & Storage Wholesale and Retail Trade covering any of the following. Gasoline stations, dry cleaners, printing, large auto and truck fleets, photographic film processing and any operations involving the use of any chemical or biological wastes or materials Wood Products Total Exclusion List Exposures (Type Outstanding Name of Loan Due Date of Activity) Exposure in Company* US$ ESMS Processes Yes/No Have there been any updates to the ESMS If yes, please provide a copy of the updated or procedure? procedure and reasons for the same. Has Senior management signed off on the If yes, please provide a copy of the same. changes? Were any transactions rejected on an If yes, please provide details. account of the exclusion list? Were there any difficulties and/or If yes, please provide details. constraints related to the implementation of the E&S procedures? Were there any material environmental and If yes, please provide details. social issues associated with borrowers during the reporting period in particular? Supervision and monitoring Yes/No Have you supervised the performance of If yes, please describe how you do this and your loans? the extent of coverage of your portfolio. MSME A2F - ERS Project (P174169) 45 Did you conduct client site visits? If yes, please describe the process including any environmental and social issues considered. Safety, Social and Community Issues Yes/No Have there been any worker accidents, If yes, please provide details. injuries on the job? Have there been any grievances against any borrower? Has there been any media coverage on a borrower? MSME A2F - ERS Project (P174169) 46 Annex F Material E&S Incident Report Template Report on E&S Issues/Incident at a Sub-borrower Date of report DD/MM/YYYY Name of Sub-borrower • Date of transaction and type of • financing Amount outstanding/tenor • Description of issue • Date and time of incident including those on sexual harassment, gender-based violence, child labour or other incidents of a social nature. • Type of incident: environmental issue, fatality, spill, etc. • Name of person/s involved/injured/deceased, if applicable • Narrative and contextual information. • Causes of incident. • Status of investigation. • Listing of parties involved in investigation (witnesses and staff, unions, police, other authorities, and other parties). Actions taken by the sub- • Reporting if required to any regulator, police, etc. borrower • Any internal investigations commenced (indicate contact name of person responsible for investigation). • Any external investigations anticipated or commenced (list all entities that have jurisdiction or could reasonably be expected to investigate the incident). • Any press releases or other media communications Follow-up by SACOMBANK • Views on the significance of the incident – degree of LAO severity, possible uncertainties, or disputed facts to be investigated. • Status of investigation. • Reports received (and outstanding, if any). • Immediate actions taken by the bank (including if communications/crisis response to be triggered). • Actions to prevent re-occurrence of incident. • Monitoring/reporting arrangements to follow up on efficacy of actions taken. • Results to date of actions taken. Conclusion • Broader conclusions for the bank/PMU 47 Annex G E&S Monitoring Report to be prepared by the bank Reviewer (Name, Title and Sub-Loan Name and #: Date loan issued: Position): Situation and Observations: 1. Are the sub-borrower’s activities the same as at origination? 2. Are there any excluded activities? 3. Are all permits in order and is the sub-borrower following all required regulations? Y / N 4. Did the SME encounter any unexpected environmental and/or social issues and how were they addressed? Any media coverage, grievance issues or outstanding liability? 5. Other Comments Approved by (Name, Title and Position): 48 Annex H Labour Management Procedures 1. OVERVIEW OF LABOR USE ON THE PROJECT The Labour Management Procedures (LMP) is a living document to be reviewed and updated throughout development and implementation of the Lao PDR MSME A2F-ESR Project (P174169). The LMP applies to all Project workers, irrespective of contracts being full-time, part-time, temporary or casual, and in line with World Bank Environmental and Social Framework (ESF) Environmental & Social Standard 2 on Labour and Working Conditions (ESS2). The Project is expected to engage a variety of staff in the PMU and the bank as identified below. Table 1 Staff Type Project Estimated Characteristics of Timing of Contracted Component Number of Project Workers Labour Workers Project Requirements Workers PMU 3 Project Throughout Direct workers Coordinators project cycle E&S Focal Point Direct workers Finance, Direct workers administrative and support staff of DOSMEP SACOMBANK 3 Loan Officer Throughout Direct worker LAO project cycle Credit Officer Direct worker E&S Focal Point Direct worker Others: Other core staff as Direct worker required 2. ASSESSMENT OF KEY POTENTIAL LABOR RISKS This section describes the following, based on available information: Key Project Activities: � Mainly office based (in common with MSME financing activities); and � Potential visits to MSME borrowers for review/monitoring. Key Labour Risks: The key labour risks which may be associated with the Project day-to-day operations are generally considered to be low (aside from COVID-19 related risks that will require special attention). Key potential labour-related risks include: � Office-related health and safety risks, including ergonomic related risks; and 49 � Possible risks associated with COVID-19. People engaged to work on the Project may meet people with COVID-19. It is therefore extremely important that all Project workers follow strict protocols as recommended by the World Health Organization (WHO) and Lao PDR requirements. Table 2 Key Labour Risks Project Activity Key Labour Risks General Project administration and A non-exhaustive list of risks that may be relevant to the Project’s implementation (loan review and implementation is provided below: processing) � Exposure to people who could have COVID-19 if without the proper Personal Protective Equipment (PPE) and/or training; � Ergonomics; � Trip and fall hazards; � Harassment; � Fire; and � Mental stress and fatigue. Visits to MSME Borrowers A non-exhaustive list of additional risks that may be relevant to the Project’s implementation are provided below: � Context hazards in MSME operations e.g., physical hazards such as moving equipment; � Traffic hazards; � Lone working in remote areas; and � Exposure to people who could have COVID-19 if without the proper PPE and/or training. 3. BRIEF OVERVIEW OF LABOR LEGISLATION: TERMS AND CONDITIONS This section sets out the key aspects of national labour legislation with regards to term and conditions of work, and how national legislation applies to different categories of workers identified in Section 1. The overview focuses on legislation which relates to the items set out in ESS2, paragraph 11 (i.e., wages, deductions and benefits). Lao PDR has national legislation that outlines worker’s rights. The Labour Law (2013) is the key document governing the regulatory framework for labour in Lao PDR. The Lao PDR government has also ratified five of the eight core ILO conventions, including those on forced labour, child labour, discrimination, minimum age and equal remuneration. The ratified conventions are summarised in the table below. Table 3 Core ILO Conventions Ratified in Lao PDR Convention Date Status C029 - Forced Labour Convention, 1930 (No. 29) 23 Jan 1964 In Force C100 - Equal Remuneration Convention, 1951 (No. 100) 13 Jun 2008 In Force C111 - Discrimination (Employment and Occupation) Convention, 1958 (No. 111) 13 Jun 2008 In Force C138 - Minimum Age Convention, 1973 (No. 138) 13 Jun 2005 In Force C182 - Worst Forms of Child Labour Convention, 1999 (No. 182) 13 Jun 2005 In Force The National Assembly adopted an amended Labour Law (No. 43/NA, 24 December 2013) (“Labour Law�) which was published in the Lao Gazette on 14 October 2014 and became effective on 29 October 50 2014. The Labour Law defines non-discrimination in employment and in wages. It establishes the need to abide by at least the government minimum wage. Working hours are limited to 8 hours per day, 6 days a week. The Labour Law is extensive and covers discrimination in the workplace, equal opportunity, gender aspects, labour disputes and collective bargaining, amongst others. A chapter in the Labour Law is dedicated to health and safety in the workplace. The Labour Law covers formal and informal workers, however, does not apply to government officials, soldiers, police, Lao Front for National Development, and mass organisations. In addition, the Law on Civil Servants, 2016 and associated Decree on Code of Conduct for Civil Servants, 2019 (No. 184 issued 29 June 2019) also largely consistent with ESS2 and applicable for the Project. The Civil Servant Law and Decree on Code of Conduct provide provisions and measures to manage, prevent and address misbehaviours and misconduct. Compliance with these requirements is monitored by the relevant Ministries, and Ministry of Home Affairs (MOHA). Child labour remains a noticeable gap in the legal framework despite many years of participation in related international programs. The Labour Law defines 12 years old as the minimum working age for children, however, workers between the ages 12 to 14-years old are meant to only engage in certain light jobs. Although this is not always closely monitored. Article 102 states that youth employees are prohibited from engaging in work that is unsafe, forced labour, work to pay off debts, human trafficking, and hazardous work. In any case, no persons under the age of 18 will be allowed work on any aspect relating to implementing the Project in the PMU and the bank and forced or indentured labour of any kind will be prohibited. 4. BRIEF OVERVIEW OF LABOR LEGISLATION: OCCUPATIONAL HEALTH AND SAFETY This section sets out the key aspects of the national labour legislation with regards to occupational health and safety, and how national legislation applies to the different categories of workers identified in Section 1. The overview focuses on legislation which relates to the items set out in ESS2, paragraphs 24 to 30. The Labour Law includes provisions on Occupational Health and Safety (OHS) mostly consistent with ESS2 of the World Bank’s Environmental and Social Framework (ESF). Additional measures must also be taken compliant with WHO guidelines on COVID-19. At the beginning of this Project, the PMU and the bank will ensure that: � Workplace health and safety standards are in full compliance with Lao PDR law. This refers particularly to: (1) basic safety awareness training to be provided to all persons (as well as on COVID-19 prevention and related measures); and (2) Adequate provision of hygiene facilities (toilets, hand-washing basins) separated by gender as needed and with distancing guidelines in place; � All workplace health and safety incidents will be properly recorded in a register detailing the type of incident, injury, people affected, time/place and actions taken, including COVID-19 cases in the workforce, which should be reported to DOSMEP and the World Bank immediately; � All workers (irrespective, where relevant, of contracts being full-time, part-time, temporary or casual) to be covered by insurance against occupational hazards and COVID-19, including ability to access medical care and take paid leave if they need to self-isolate as a result of contracting COVID-19; � Fair and non-discriminatory employment practices are in place; � Provide PPE as suitable to the task and hazards of each worker, without cost to the worker; 51 � Under no circumstances will contractors (if required), suppliers or sub-contractors engage forced labour or children under the age of 18; � All employees are aware of their rights under the Labour Law, including the right to organise; and � All employees are to be informed of their rights to submit a grievance through the established Grievance Mechanism. In relation to COVID-19 basic infection prevention measures, drawn from the World Health Organization (WHO) are included in section 6 below. 5. RESPONSIBLE STAFF This section identifies the functions within the Project responsible for Labour Management: � DOSMEP: Human resources staff will be responsible for the engagement of direct workers and the bank with compliance with labour and work conditions. DOSMEP will address all LMP aspects as part of its human resources management and engagement with the bank. The PMU established within DOSMEP will be responsible for overseeing all aspects of implementation of the Project, including the management and monitoring of the bank. � SACOMBANK LAO: will in turn appoint personnel who will be responsible for supporting the implementation of the LMP and reporting to the PMU. 6. POLICIES AND PROCEDURES This section sets out information on OHS, reporting and monitoring and other general project policies. Where relevant, it identifies applicable national legislation. Where the Borrower has stand-alone policies or procedures, these can be referenced or annexed to the LMP, together with any other supporting documentation. COVID-19 Considerations The following is from WHO: � Make sure your workplaces are clean and hygienic o Surfaces (e.g., desks and tables) and objects (e.g., telephones, keyboards) need to be wiped with disinfectant regularly o Why? Because contamination on surfaces touched by employees and customers is one of the main ways that COVID-19 spreads � Promote regular and thorough handwashing by employees, contractors and customers o Put sanitizing hand rub dispensers in prominent places around the workplace. Make sure these dispensers are regularly refilled o Display posters promoting hand-washing – ask your local public health authority for these or look on www.WHO.int. o Combine this with other communication measures such as offering guidance from occupational health and safety officers, briefings at meetings and information on the intranet to promote handwashing o Make sure that staff, contractors and customers have access to places where they can wash their hands with soap and water o Why? Because washing kills the virus on your hands and prevents the spread of COVID19 52 � Promote good respiratory hygiene in the workplace o Display posters promoting respiratory hygiene. Combine this with other communication measures such as offering guidance from occupational health and safety officers, briefing at meetings and information on the intranet etc. o Ensure that face masks9 and / or paper tissues are available at your workplaces, for those who develop a runny nose or cough at work, along with closed bins for hygienically disposing of them o Why? Because good respiratory hygiene prevents the spread of COVID-19 � Advise employees and contractors to consult national travel advice before going on business trips. � Brief your employees, contractors, and customers that if COVID-19 starts spreading in your community anyone with even a mild cough or low-grade fever (37.3 C or more) needs to stay at home. They should also stay home (or work from home) if they have had to take simple medications, such as paracetamol/acetaminophen, ibuprofen, or aspirin, which may mask symptoms of infection o Keep communicating and promoting the message that people need to stay at home even if they have just mild symptoms of COVID-19. o Display posters with this message in your workplaces. Combine this with other communication channels commonly used in your organization or business. o Your occupational health services, local public health authority or other partners may have developed campaign materials to promote this message o Make clear to employees that they will be able to count this time off as sick leave. There are a substantial number of documents available providing further detailed guidance. For the bank staff that will be sub-borrower-facing, additional considerations apply and plans, or procedures should be in place to address the following issues: � Obtaining adequate supplies of Personal Protective Equipment (PPE), including medical masks and respirators (N95 or FFP2), eye protection (goggles or face screens), hand washing soap and sanitizer, including for when travelling to meet sub-borrowers. Where relevant PPE cannot be obtained, the plan should consider viable alternatives, such as cloth masks, alcohol-based cleansers, hot water for cleaning and extra handwashing facilities, until such time as the supplies are available; � Training staff on the latest WHO advice and recommendations on the specifics of COVID-19; � Conducting enhanced cleaning arrangements, including thorough cleaning (using adequate disinfectant) of “touch points� including common areas, door handles, floors and all surfaces that are touched regularly; � Training and providing cleaning staff with adequate PPE when conducting cleaning; � Implementing a communication strategy/plan to support regular communication, accessible updates, and clear messaging to, regarding the spread of COVID-19 in nearby locations, the latest facts and statistics, and applicable procedures. 7. AGE OF EMPLOYMENT Persons below the age of 18 years old should not be employed to carry out any undertakings of the Project. 9 Ordinary surgical face masks rather than N95 face masks 53 8. TERMS AND CONDITIONS All terms and conditions as outlined in the ESS2, paragraphs 9 to 30 apply to direct workers. In addition: � In line with national law, the maximum working hours are limited to 8 hours per day, 6 days a week unless there is payment of overtime. � The compensation packages will be defined in employee contracts. No salaries paid by DOSMEP or the bank are lower than the Lao PDR minimum wage. � Employment opportunities will be available to all. This includes equal pay for equal work, regardless whether the person performing the work is male or female. � All workers of DOSMEP and the bank are entitled to insurance against occupational hazards, including ability to access medical care and take paid leave if they need to self-isolate as a result of contracting COVID-19. 9. GRIEVANCE MECHANISM This section sets out details of the grievance mechanism that will be provided for direct and contracted workers as defined in the Labour Management Procedure of the Project and describes the way in which these workers will be made aware of the mechanism. There will be a specific Grievance Redress Mechanism (GRM) for project workers as per the process outlined below. This considers culturally appropriate ways of handling the concerns of direct workers. Processes for documenting complaints and concerns have been specified, including time commitments to resolve issues. All Project workers will be informed of the Grievance Mechanism, if one is not already available internally that meets the requirements of ESS2. The process for the Worker GRM is as follows: � The first step is that the complainant may report their grievance in person, by phone, text message, mail or email (including anonymously if required) to their direct Supervisor as the initial focal point for information and raising grievances. For complaints that were satisfactorily resolved by the complainant, the incident and resultant resolution will be logged and reported to the E&S Focal Point of the Bank. � As a second step, where the complainant is not satisfied, the Supervisor (or the complainant directly) will refer the aggrieved party to the Human Resources department. The Human Resources department endeavours to address and resolve the complaint and inform the complainant as promptly as possible, in particular if the complaint is related to something urgent that may cause harm or exposure to the person. For complaints that were satisfactorily resolved by Human Resources department, the incident and resultant resolution will be logged by the E&S Focal Point. Where the complaint has not been resolved, the E&S Focal Point will refer to the Management of the relevant organisation for further action or resolution. � If the complaint remains unresolved or the complainant is dissatisfied with the outcome proposed by Management of DOSMEP and the bank respectively, the complainant may refer the matter to the appropriate court, at the complainant’s own expense. A decision of the Court will be final. Each grievance record should be allocated a unique number. Complaint records (letter, email, record of conversation) should be stored together, electronically or in hard copy. The E&S Focal Point and the PMU will be responsible for undertaking a regular (at least monthly) review of all grievances to analyse and respond to any common issues arising. The E&S Focal Point in the PMU and the bank is also responsible for oversight of the GRM. 54 For recording and documentation purposes, the following Grievance Form and Grievance Tracker should be used (if there is not an existing process). Table 4 Grievance Form Internal Grievance Form Date (dd/mm/yyyy): Time (24 hr format): Date/Time Name and Contact Details of � This is an anonymous grievance. Complainant: Information about Representative(s) of the Complainant: Name of the relevant employer (DOSMEP/SACOMBANK LAO) � Photograph(s): Supporting Documents Provided: � Voice Recording: � Documents: � Others: Brief Description: (What happened? Who was involved? Who did it happen to?) 55 Table 5 Grievance Tracker Log Details of Complainant Resolution Current SN Name (if not Method to Status Date Description of the Issue Contact Details Action Proposed Action Taken anonymous) Contact 001 002 003 004 005 006 007 008 009 010 011 012 013 014 015 016 017 018 019 020 021 022 023 024 025 56 Annex I Sacombank’s Vision, Mission and Value Vision To be the leading modern universal retail Bank in the region. Mission - Providing best-in-class multi-purpose financial solutions for customers. - Maximizing added value to partners, investors, and shareholders. - Strengthening the banking industry and protecting staff wellbeing - Committing to build social communities. Core Values - Overcoming challenges towards success - Providing innovative approaches for sustainable development. - Strengthening community and social responsibility. - Making a difference with breakthrough innovations in business and operations HR Policies - General terms and conditions of employment - Recruitment Policy - Occupational Health and Safety Policy, including Hygiene and Fire Emergency Response - Policy on Grievances and Conflict Solutions - Policy on Security - Policy Leave and Allowance - Policy or prohibitions on drug, gambling, discrimination (more detail indicated in the Annex J). Source: https://www.sacombank.com.la/la/en/CorporateProfile/Pages/Establishment-and- Deveplopment.aspx 57 Annex J Evaluation of Labour Management System and Practice of Sacombank This appendix aims to document the comparative analysis of the Human Resource (HR) Policies of SACOMBANK LAO against the requirements of ESS2, and to identify whether or not there are significant gaps exist. Summary The SACOMBANK LAO has established a sound labour management system with clear written guidelines and procedures in the form of a comprehensive set of human resource policies that comply, and in some instances surpass, the requirements of the 2013 Labour Law of Lao PDR. Overall, SACOMBANK LAOs practices and performance in Human Resource management comply with the requirements of ESS2. As per the letter of request from DOSMEP (PMU) no 0171/�ສວ, dated 09 March 2022 for information on implementation and compliance with its HR policies and the National Labor Law by the SACOMBANK, the Department of Labor Management under the Minister of Labor and Social Welfare of Laos confirms that the SACOMBANK and none of the MSMEs whose loans will be refinanced through the Bank have never been reported for HR policy and Labor Law violations. An additional scanning conducted by the DOSMEP’s consultant also verifies that there were no OHS incidents, contract issues, social issues and grievances that might have been raised by their staff and workers reported and posted on the local and social media. 1. HR Policies and Procedures The SACOMBANK LAO has been operating its business in Lao PDR since 2008. As of 2021, the bank has a total workforce of 200, and female accounted for about 41%. The SACOMBANK LAO has HR policy and a regulation on labour management in place since 2008 and is updated regularly. The HR department and federation of trade unit is responsible for HR policy making and revision, daily operations (recruitment, training, remuneration, social insurance, etc.), and performance evaluation. In Lieu of Labour Management Procedures, the SACOMBANK LAO has a comprehensive set of human resource policies in place, and strictly comply with the labour code of Lao PDR, which are mainstreamed into the policies and procedures of SACOMBANK LAO and certified by Department of Labour Management, Ministry of Labour and Social Welfare. The effective labour management regulation (No. 018, dated 15/10/2021) that was assessed include the following policies or regulation, among others: - General terms and conditions of employment - Recruitment Policy - Occupational Health and Safety Policy, including Hygiene and Fire Emergency Response - Policy on Grievances and Conflict Solutions - Policy on Security - Policy Leave and Allowance - Policy or prohibitions on drug, gambling, discrimination, etc. Evaluation and conclusion: Following the Lao PDR’s labour law and regulations, the SACOMBANK LAO has defined its Human Resource Management system through a series of policies and procedures, that address the main requirements of ESS2. 58 2. Terms and conditions The SACOMBANK LAO’s sample labour contract and labour management regulation (No. 018, dated 15/10/2021) were provided for review. When signing a labour contract, the basic terms and conditions, including the term of specific job positions, work content and place of work, work time and rest time, labour remuneration, bonus and social insurances, labour protection, labour conditions and protection against occupational hazards, and entitlement to re-imbursement for travel expenses are specified. Article 17 of the labour management regulation defines working hour. Working hours are in alignment with the Lao PDR’s regulations (of not more than 48 hours a week) and overtime work is compensated in accordance with Lao PDR’s regulation on overtime. The SACOMBANK LAO Branches and HQ are operating 5 days a week, from Monday to Friday. Employees are entitled to paid leave (exclusive of the 7 Lao national holidays and 1 Vietnam National Day) as well as maternity as well as sick, maternity and family/leave as required by 2013 Labour Law of Lao PDR. In accordance with the 2013 Labour Law of Lao PDR, SACOMBANK LAO employees will receive written notice of termination and details of severance payments required by law, in a timely manner. As mandated by the Labour law, wages earned, social insurance benefits, pension contributions and other entitlements are paid prior to termination. Evaluation and conclusion: Lao PDR’s 2013 labour law includes provisions on employment, labour contract management and leave, contract termination, remuneration, and the SACOMBANK LAO relevant practices comply and surpass such provisions, and are communicated to all employees through induction training, on-the-job training and routine operations. In terms of contract terms and working conditions for direct workers, there is no gap between the SACOMBANK LAO practices and ESS2. 3. Non-discrimination and Equal Opportunity The SACOMBANK LAO has in place a policy on non-discrimination. Under this policy SACOMBANK LAO is committed to maintaining a working environment free from all forms of discrimination. In addition, all applicants are given an equal opportunity to gain employment and to progress professionally. Equal opportunity applies without regard to race, colour, sex, religion, age, marital status, disability, veteran status or national origin. A specific clause is included in the non- discrimination policy to specifying that disability will not be barrier to employment. Complaints regarding the application of this policy can be lodged with the HR department, and disciplinary action (including termination) may result from those who engage in any form of discrimination. The policy also includes a clause specifying that there will be no retaliation against those who file complaints. In addition, SACOMBANK LAO has in place a policy explicitly targeting incidents of sexual harassment. Evaluation and conclusion: The policies and requirements on non-discrimination, equal opportunity, and anti-sexual harassment that SACOMBANK LAO has in place are aligned with the requirements of ESS2. 4. Workers Organizations While SACOMBANK LAO currently does not have a worker organization, the 2013 Labour Law allows for trade unions to be “established within labour units that have been operating for at least six months or within other branches of work where employees see fit to establish such, at the central, provincial, municipal or district level.� Evaluation and conclusion: a worker organization has not yet in place; it is legally possible for such an organization to be established in an organization such as SACOMBANK LAO. 59 5. Age of employment The SACOMBANK LAO complies strictly with Lao PDR’s policy and international commitments on the prohibition of child labour, and, given the nature of the industry (financial services) does not employ anyone under the age of 18. Evaluation and conclusion: In consideration of the nature of job positions, there is no risk of children under the age of 18 being employed in SACOMBANK LAO. 6. Forced Labour The SACOMBANK LAO complies strictly with Lao PDR’s policy and international commitments on the prohibition of forced labour and given the nature of the industry (financial services), there have been no instances of forced labour that have or are likely to occur. Evaluation and conclusion: Given of the nature of job positions and industry, there is no risk of forced labour being employed in SACOMBANK LAO. 7. Employee Grievance Redress Mechanism Article 33 and 34 defines measures for handling grievance and labour conflict. The SACOMBANK LAO has included a grievance procedure in HR policies that encourages employees to bring any workplace grievance to the attention of their immediate supervisor or upper-level management. In cases where the immediate supervisor does not address the concern within a specified amount of time (5 days), or if the supervisor is the problem, then the next level of supervision should be engaged. The procedure is designed to avoid legal exposure but does not preclude the possibility of making claims using the labour dispute resolution committee specified in the 2013 Labour Law, or recourse to the courts. Evaluation and conclusion: A grievance mechanisms proportionate to the type of workplace has been provided to all SACOMBANK LAO workers, who are informed of its existence at the time of recruitment, along with the measures to protect them from retaliation. The grievance mechanism does not impede access to other judicial or administrative remedies. The grievance procedure is aligned with the requirements of ESS2 on grievance mechanism as well as the National law on Handling Grievances, 2016. 8. Occupational Health and Safety Article 33 and 34 defines about occupational health and safety. Under its OHS and General Safety policies SACOMBANK LAO commits to providing a safe and healthy workplace. The administration and HR departments are responsible for assessing safety reports from staff, monitoring health and safety conditions in the workplace, developing and putting in place OHS systems, and preparing and conducting training programs on OHS. The policy includes guidelines on specific risks relevant to the SACOMBANK LAO workplace specifying staff responsibilities with regard to the safe use of office furnishings and equipment, the risk of fire, and lifting heavy loads. This policy is complemented by a road safety policy and a policy on the prevention of violence in the workplace. Evaluation and Conclusion: The comprehensive OHS policy (inclusive of practical guidelines), complemented by the general safety, road safety and violence prevention policies of SACOMBANK LAO are aligned with the requirements of ESS2. 60 Annex K List of Sub-loan for Refinancing under Sacombank N Name of business Type of Business Size E&S Sector Date of Loan Type of Location Refinance - o business Size Category [ Trading, contract purpose in Loan able /Business (MI= [H=High, Services and detail and Purposed (USD) Activities Micro, S= M= Manufacture] sector [Working (describe) Small, Medium, Capital vs. M= L=Low Investment Medium) Risk] Capital] 1 VALANDY Restaurant: M 15 tables, L Services 20/01 20/01 Increase Working Champac 53,070 VANNALATSAMY Noodle (Pho) 144 m2 /2021 /2026 working Capital k and cook as (12 mx12 capital province order m) (CPS) 2 BOUAPHANH Sale of clothes MI L Trading 22/01 22/01 Building Investment Vientian 37,873 CHANTHACHITH area:200 /2020 /2030 shop Capital e Capital m2 (VTE) 3 XAYPHONE Restaurant: S L Services 09/01 09/01 Expand the Working VTE 72,982 NGONGVORALATH area:375 Rice noodle /2020 /2025 business Capital m2 with ginger 4 LOTKHAM BACKAM Restaurant: S L Services 27/04 27/04 Expand the Working VTE 46,381 Noodle (Pho) area:250 /2020 /2025 business Capital and cook as m2 order 5 VISAY VORACHACK Food, coffee S L Services 04/01 04/01 Expand the Working VTE 50,000 area:200 and beverage /2021 /2021 business Capital m2 store 6 PHOUVAN sell Lao S L Trading 24/02 24/02 Expand the Working Savanna 31,400 SINLAVONG sold: 200 cement /2020 /2025 business Capital khet T/month, province 253 m2 (SVK) 7 NONGKHAN wholesale S Bought: L Trading 19/03 19/03 Increase Working SVK 200,000 TUISITTHIPHONEXAY business to 27,600 /2020 /2025 working Capital sell Beer Lao, bottle/mon capital drink. th 8 CHANTHAPHILIT Maintaining, S sold: 60 L Other 21/10 21/10 Increase Working SVK 90,989 MEKSAVANH installing, and unite/mont /2020 /2025 working Capital selling all type h, 382 m2 capital 61 N Name of business Type of Business Size E&S Sector Date of Loan Type of Location Refinance - o business Size Category [ Trading, contract purpose in Loan able /Business (MI= [H=High, Services and detail and Purposed (USD) Activities Micro, S= M= Manufacture] sector [Working (describe) Small, Medium, Capital vs. M= L=Low Investment Medium) Risk] Capital] of air conditioning 9 SVT TRADING SOLE Wholesale and S L Trading 03- 03- Increase Working VTE 86,841 CO., LTD area:475 retail store 12- 12- working Capital m2 2020 2025 capital 10 KHAMKHAO Sale of gold MI L Trading 13/07 13/07 Increase Working VTE 47,368 CHANTHO sold:15-20 and jewels /2020 /2025 working Capital bath/month capital 11 PHATTHAKHONE Diagnostic S 5 sets of L Services 01/08 01/08 Increase Investment VTE 50,376 BANOUVONG clinic big beds, /2020 /2027 Invest in Capital area: 464 machinery m2 (15mx30m ) 12 SAMLAN Sale of clothes MI L Trading 10/01 10/01 Increase Working VTE 45,613 PHUTTHAVONGSA area: 9 m2 /2020 /2025 working Capital (3mx3m) capital 13 SOMPHET Restaurant; S L Services 16/09 16/09 building- Investment VTE 109,592 VONGSAYYA Karaoke room 5-8 rooms /2020 /2030 repair Capital 14 THILAVANH Repairing car S area: 225 L Other 05/08 05/08 Building Investment VTE 98,209 VONGSOUTHI and sale of car m2 (15m x /2020 /2035 accommod Capital tires, and other 15m) ation 15 VIENTIANE ICE SOLE Ice factory S 3 machines L Manufacture 01/07 01/07 Invest in Investment VTE 200,000 CO., LTD area: 375 /2020 /2027 machinery Capital m2 (15m x 25m) 16 LATTANAPHONE Sell gold MI 10-25 L Trading 29/06 29/06 Working Working VTE 59,946 SAPHOUVONG bad/month /2020 /2025 Capital Capital 62 N Name of business Type of Business Size E&S Sector Date of Loan Type of Location Refinance - o business Size Category [ Trading, contract purpose in Loan able /Business (MI= [H=High, Services and detail and Purposed (USD) Activities Micro, S= M= Manufacture] sector [Working (describe) Small, Medium, Capital vs. M= L=Low Investment Medium) Risk] Capital] 17 PHANLA PHILAVONG Urine cloth MI area: 14 L Trading 21/01 11/11 Investment Investment VTE 50,699 m2 /2021 /2035 Capital Capital (4mx4m) 18 SOUPHACHIT Rent tables, S area: 300 L Services 20/01 20/01 Increase Working VTE 84,313 CHANHTHANEEVONG chairs m2 /2020 /2026 working Capital (10mx20m capital ) 19 DAOPHET Repairing car MI area: 56 L Services 25/08 25/08 Investment Investment VTE 83,684 THIPPHAVONG m2 /2020 /2025 Capital Capital (7mx8m) 20 SOUKSOMCHAY Sell gold MI area: 21 L Trading 08/04 08/04 Increase Working VTE 42,982 VONGSAVANH m2 /2020 /2025 working Capital (7mx3m) capital 21 THILAPHONE Massage shop S 10 rooms L Services 22/10 22/10 Building Investment VTE 73,684 PHADOUANGDETH area: 300 /2020 /2035 shop Capital m2 22 KANCHANA IMPORT- S area: 400 L Trading 26/02 26/02 Increase Working VTE 48,246 COMMERCE IMPORT- EXPORT of /2021 /2026 working Capital EXPORT|SOLE CO., m2 (20m x candy 20m) capital LTD 23 SONEPHINE Sell MI L Trading 21/01 21/01 Increase Working VTE 45,263 XAYYANAM area: 192 construction /2020 /2025 working Capital m2 equipment capital 24 CHIVONE Restaurant: S L Services 21/04 21/04 Increase Working VTE 63,158 SAYAVONGSING food huts /2021 /2026 working Capital 25 huts capital 25 KHAMMOUNG Accommodati MI L Services 03/03 26/2/ Increase Working VTE 49,064 PHOMMACHANH on Service /2021 2026 working Capital 28 rooms capital 63 N Name of business Type of Business Size E&S Sector Date of Loan Type of Location Refinance - o business Size Category [ Trading, contract purpose in Loan able /Business (MI= [H=High, Services and detail and Purposed (USD) Activities Micro, S= M= Manufacture] sector [Working (describe) Small, Medium, Capital vs. M= L=Low Investment Medium) Risk] Capital] 26 PHAIVANH wholesale and S L Services 14/02 14/02 Increase Working VTE 37,718 area: 70 PHETVANKHAM retail store /2020 /2025 working Capital m2 (7mx10m) capital 27 SOUKSAMAI Restaurant S L Services 16/3/ 16/3/ Increase Working VTE 32,982 VONGSATHIEN 2020 2025 working Capital 15 tables capital 28 SOMBAT Sell S L Trading 10/03 10/03 Increase Working VTE 77,192 DUANGPASERT construction area: 300 /2020 /2025 working Capital equipment m2 (15m x capital 20m) 29 VONGLATSAMY Restaurant: S 20-30 huts L Services 04/03 04/03 Building Investment VTE 78,868 SAYPANYA food huts /2020 /2035 restaurant Capital VONGLATSAMY Restaurant: S 20-30 huts L Services 09/08 09/08 Increase Working VTE 50,175 SAYPANYA food huts /2020 /2025 working Capital capital 30 CHANTHACHONE Cattle Farm S L Agriculture 23/02 23/02 Increase Working VTE AGRICULTUE FARM /2021 /2026 working Capital SOLE.CO., LTD capital: purchase 100 Cattles cattle, vaccine 137,544 and supplemen t 64 N Name of business Type of Business Size E&S Sector Date of Loan Type of Location Refinance - o business Size Category [ Trading, contract purpose in Loan able /Business (MI= [H=High, Services and detail and Purposed (USD) Activities Micro, S= M= Manufacture] sector [Working (describe) Small, Medium, Capital vs. M= L=Low Investment Medium) Risk] Capital] 31 BOUNKHAM FARM Cattle Farm S L Agriculture 12/11 12/10 Building Investment CPS /2020 /2030 cattle Capital 80 Cattles house 84,211 32 CHINDAMANY Cattle Farm S 60 Cattles L Agriculture 26/2/ 26/2/ Increase Working CPS DEVELOPMENT 2021 2026 working Capital AGRICULTURE SOLE capital: CO., LTD purchase cattle and 80,786 supplemen t 60 Cattles 26/2/ 26/2/ Repairing Investment CPS 2021 2031 and Capital building 21,053 cattle stall 33 NAKA FARM SOLE Chicken Farm S L Agriculture 03/04 03/04 Increase Working VTE CO., LTD /2021 /2031 working Capital capital to 1.000 purchase Chicken chicken 78,947 feed and farm equipment 34 SOMCHIT Raising fish, S L Agriculture 24/02 24/02 Increase Working VTE CHALERNSUB SOLE 3 ponds planting /2021 /2026 working Capital CO., LTD 100 bamboo trees capital for bamboo raising buy fishes, trees 99,911 younger and bamboo 150 coconuts trees and coconuts coconuts 65 N Name of business Type of Business Size E&S Sector Date of Loan Type of Location Refinance - o business Size Category [ Trading, contract purpose in Loan able /Business (MI= [H=High, Services and detail and Purposed (USD) Activities Micro, S= M= Manufacture] sector [Working (describe) Small, Medium, Capital vs. M= L=Low Investment Medium) Risk] Capital] area: 2 Hectares 35 SAYLIPHARB FARM Chicken Farm: Mi Agriculture 25/03 25/03 Increase Working SVK PRIVATE ENTERPRISE Saigon breed, /2021 /2026 working Capital and Myanmar capital and Investment breed, Thai Investment Capital breed. Capital for 80-90 buy chicken 50,968 chicken, feed and building new stables TOTAL: 2,652,088.74 66